The figures come from LCP’s annual ‘Sole Mates’ survey and report into the Professional and Sole Trustee market which is being launched in September. The survey is based on responses from 13 Professional Trustee firms, appointed to 2,432 schemes. Of these schemes, 900 are Sole Trustee appointments.
LCP expects the Sole Trustee market to continue to expand with double digit annual growth. This will be a rate that outstrips the appointment of Professional Trustees to schemes more generally.
According to the survey, the key reasons schemes decide on a move to a sole trustee is the need for increased efficiencies, (46%) succession planning, (38%) and regulatory burden and specialist knowledge (16%.)
The report highlights the differences in the models used in Sole Trusteeship. The APPT code of conduct suggests at least two accredited trustees should be involved in the governance model for each Sole Trustee appointment. This guidance has been interpreted differently by firms and has led to the evolution of 3 models of decision making. The key points of difference in the models are:
• who is making decisions
• how much challenge is there in the decision making process
• how much support is on-hand to operate in an efficient manner
The full report will touch on TPR's views of Sole Trustees and Professional Trustees, the different models and how the Professional Trustee firms can futureproof their set ups for upcoming regulation by DWP and TPR.
Holly McArthur, Partner at LCP and co-author of the report, commented: “The incredible growth in the appointment of sole trustees is testament to the many advantages that it brings to schemes, namely professionalism and expertise.”
Nathalie Sims, Partner at LCP added: “There is a general trend of increased regulation and accreditation that is coming to the trustee market as highlighted by the recent call for evidence from the DWP on pension trustee skills, capability and culture. The innovations and regulatory changes that this will hopefully deliver should be welcomed. It will enhance the benefits that a Professional Trustee, a Sole Trustee model can offer, iron out any creases and further boost good governance and transparency.”
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