Rift Emerges Between Benefits and Perception of Fiduciary Management
11 June 2012 (PLANSPONSOREurope.com) - A rift has emerged between the perception of fiduciary management and the reality of the benefits it brings, according to a poll by Russell Investments.
The research reveals two thirds (67%) of participants perceive a reduction in trustee control as a barrier to using a fiduciary manager, while 97% of respondents see the primary benefit of working with a fiduciary manager as being the speed of decision-making and execution applied to investment portfolios.
Most (74%) of the pension fund trustees and other institutional investors surveyed also believe in the value of appointing an independent third party for selecting and monitoring a fiduciary manager.
Heath Mottram, head of fiduciary management at Russell, said: “There is obviously a perception among those who currently don’t use a fiduciary manager that they will relinquish control of their scheme, but the experience of those who have chosen the fiduciary management route is very different to that perception – they see the benefits that delegated investment decision-making can bring.
“I’m slightly surprised that as many as a quarter of those we asked wouldn’t automatically seek independent support when making such a significant decision. Selecting a fiduciary manager is an important decision – and one which requires thought and due process. There are many differences between what different providers in this space offer and the appointment of an independent third party when selecting and monitoring the performance of a fiduciary manager would be a sensible step to take for many.”