Fiduciary management for pension schemes
Produced in partnership with Georgina Davies of Lane Clark and Peacock

The following Pensions practice note produced in partnership with Georgina Davies of Lane Clark and Peacock provides comprehensive and up to date legal information covering:

  • Fiduciary management for pension schemes
  • What is fiduciary management?
  • Types of fiduciary management
  • Providers of fiduciary management services
  • Duties of the fiduciary manager
  • Duties that cannot be delegated to the fiduciary manager
  • Rationale for using fiduciary management services
  • Potential challenges to using fiduciary management services
  • CMA investigation into the investment consultancy market
  • Mandatory tendering requirements
  • More...

Fiduciary management for pension schemes

This Practice Note looks at the nature of fiduciary management services for occupational pension schemes, including (among other things) the different types and who provides them, the rationale for and potential challenges to using them, considerations for pension scheme trustees when appointing a fiduciary manager, and how fiduciary management works in practice.

For further information on the requirements imposed by the Competition and Markets Authority (CMA) and the Department for Work and Pensions on trustees of occupational pension schemes relating to the appointment of investment consultants and fiduciary managers, see Practice Note: Appointing investment consultants and fiduciary managers—the pensions requirements.

What is fiduciary management?

Fiduciary management in its earliest form originated in the Netherlands in the 1990s, with the first UK mandate implemented in the early 2000s. In the UK, fiduciary management services are prominently used by defined benefit (DB) schemes, although there is some limited use by defined contribution (DC) schemes.

Traditionally, advice provided to trustees on investment strategy and the investment of assets to implement the strategy have been separate functions carried out by separate entities. Under this traditional approach, a pension scheme employs an investment consultant to give strategic advice on its long-term asset allocation and asset managers are selected and appointed by the trustees (on recommendations from the investment consultant) to implement this. Trustees must contract with each asset manager

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