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Press Release: Size of schemes converting to fiduciary management surges in H1

Size of schemes converting to fiduciary management surges in H1

September 07, 2021 - The average size of a pension scheme taking on a fiduciary manager shot up by nearly 80% during the first half of the year as the benefits of the model took hold in the thick of the Covid-19 pandemic, according to IC Select.

In its latest annual survey of the fiduciary management sector, published today, IC Select found that the average size of a UK pension scheme recruiting a fiduciary manager to oversee its assets rose by 79% to £270 million over the six months to 30th June 2021.[1]

That marks an increase of £120 million against the average figure over the preceding five years, which stood at roughly £150 million, according to IC Select’s research.


IC Select, established in 2007, is the only UK company that focuses entirely on selecting and monitoring investment consultants and fiduciary managers. This is the first time that it has made the findings of its annual fiduciary management surveys public.

In fiduciary management, a single provider is awarded the mandate to act as both investment consultant to a pension fund and as the manager of its assets. The model has become an increasingly popular alternative to the advisory consulting governance model, particularly among smaller schemes. The sharp rise in the average size of pension schemes converting to fiduciary management during the first half of the year comes as pension trustees were forced to dramatically adapt their practices after the onset of Covid-19.

With the vast majority working from home, it meant that holding regular meetings of trustee boards to discuss and review performance and best practice was made much more complicated, particularly as investment markets were extremely volatile at the time.

Some trustees, including at bigger schemes, appear to have used the crisis as a way of making their governance and management arrangements more robust in order to be better prepared for future problems.

Director and Head of Research Anne-Marie Gillon said “recent years have seen a significant increase in the adoption of fiduciary management by trustees.  Much of this has been driven by the increasing complexity of investment solutions and the economies of scale that can be achieved, particularly for smaller schemes.  However, the reassessment of governance practices, as a result of Covid, at the same time as a need to react to rapidly changing markets, appears to have given a further boost to the sector.”

IC Select also found in its annual survey that:

  • The UK fiduciary management market has almost doubled in size by number of funds, increasing by 96% over the past five years; based on assets under management, the market has grown by 170% over the same period.
  • The vast majority, or 78%, of fiduciary management contracts retendered on the instructions of the Competition and Markets Authority over the 18 months to 30th June 2021 were won by incumbent providers.
  • Just 10% of pension schemes that use fiduciary managers receive their strategic advice from a third party.
  • Only a minority of schemes, at 31%, seek independent oversight of their provider, despite encouragement from The Pensions Regulator.

For the survey, IC Select sent a detailed questionnaire to 17 of the leading participants in the fiduciary management sector. Data from the responses were taken as at 31st December 2020 and then updated to 30th June 2021. Previous IC Select annual surveys were used for comparison and for aggregating the data.

A full version of the survey is available.

Notes to editors

IC Select is an independent, employee-owned firm that was established in 2007. It focuses solely on the selection and oversight of investment consultants and fiduciary managers. The full list of participants in the annual survey and update is: Aon, BlackRock, BMO, Cambridge Associates, Cardano, Charles Stanley Asset Management, Goldman Sachs Asset Management, Kempen, Legal & General Investment Management, LGT Vestra, Mercer, River and Mercantile, Russell Investments, Schroders, SEI, State Street Global Advisors and Willis Towers Watson.

For enquiries, please contact:

Anne-Marie Gillon -  This email address is being protected from spambots. You need JavaScript enabled to view it.


Peter Dorward – This email address is being protected from spambots. You need JavaScript enabled to view it.


[1] We have excluded from our figures for average scheme size the funds of two large schemes that have recently transferred to fiduciary management from management by an in-house team.

Had their combined assets been included in the analysis, then the average scheme size would have increased to more than £1.3 billion.

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Saturday, 25 September 2021