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Pensions Expert Article: Big schemes turn to fiduciary managers during pandemic

This article was published in Pensions Expert, bBenjamin Mercer | September 7, 2021

 

Data crunch: The average size of a pension scheme taking on a fiduciary manager rose by around 80 per cent during the Covid-19 pandemic, suggesting the flexibility afforded by the model was particularly attractive in turbulent market conditions, according to research from IC Select.

 

The pandemic accelerated an existing trend, the research found, as the UK fiduciary management market has grown by 14 per cent a year over the past five years by number of clients, with assets under management up 22 per cent a year over the same period.

 

Around 60 schemes a year converted to fiduciary management during the five years leading up to 2019, but that number fell by 45 per cent during 2020, which the IC Select report attributes to trustees having “to adjust to new ways of working while responding to the issues raised by the pandemic”.

 

“The rate of schemes converting largely recovered during the first half of 2021 as the workloads of trustees began to return to more normal levels. This was despite the considerable strain placed on fiduciary managers as a result of having to respond to the [Competition and Markets Authority’s] new guidelines on retendering,” it stated. 

 

“It might also be a reflection of the Covid crisis, as trustees reviewed their governance arrangements to make them more robust against future crises.”

 

During the first half of 2021, the average size of a converting scheme increased by £120m, or 79 per cent, to £270m, after several years where the figure was relatively stable at around £150m.

 

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Survey of the UK fiduciary management market
Press Release: Size of schemes converting to fiduc...
 

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Sunday, 26 September 2021