Pitmans Trustees (PTL), the leading independent trustee and governance services provider, today urged schemes to proceed with caution when considering a fiduciary management solution.
Richard Butcher; MD of PTL, commented; ‘We are keen advocates of timely and prompt investment decision making and execution. In this context we think that Fiduciary Management can be a good solution, however, we also think it presents some risks. Firstly, the term ‘fiduciary management’ is not consistently used. The solutions being offered, under this term, by different providers can be very, very different and what’s included in one ‘package’ may well not be in another. Trustees do not, therefore, always actually understand what they are buying and whether it’s really what they want or need. This can lead only to disappointment. It is crucial, when looking at Fiduciary Management as a potential solution, that trustees firstly understand what they need and want, then source some relevant providers and make absolutely sure they’re comparing like for like. It is also crucial to take some independent and impartial advice.
‘There is also a significant concern around the lack of competitive tenders in this market and clients being transitioned from one solution/service to another without any independent advice or seeing alternative providers. This is not good governance and could result in some serious issues.’
Butcher added; ‘Whilst fiduciary management remains a very good solution for some schemes, as long as they have properly understood what they are buying, for other schemes it may not be the best fit. Other options could be, for example, to employ a CIO or form an investment sub-committee tasked with making the timely decisions that larger trustee boards struggle with.’
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