NETHERLANDS - The fiduciary management of pension assets costs up to 23 basis points more than other forms of asset management, according to a survey by Dutch pension consultant Bureau Bosch.
"It is important that the extra costs above passive management are justified by the services rendered and outperformance," says the consultant, commenting on today's Dutch Fiduciary Manager Survey 2008.
The average fiduciary portfolio costs 34 basis points, which according to Bureau Bosch is "about 10 basis points more expensive than an average active portfolio, and about 23 basis points more expensive than a passive portfolio".
The consultant added: "Taken on the total Dutch pension capital of €720bn, the difference in total costs is respectively €720m and €1.7bn."
The study, which polled 20 fund managers, also reveals over half of the suppliers of fiduciary management in the Netherlands are overseas fund managers.
Bureau Bosch divides fiduciary management into four categories, ranging from ultra light, which is the in-sourcing of multi-management and other services on a modular basis, to light, medium, and strong - an all-in solution for pension and asset management.
"The main suppliers of the medium and strong model are of Dutch origin," says the consultant, adding nine out of 16 fund managers offering the medium and strong fiduciary management variant are Dutch.
Bureau Bosch added since the Dutch fund managers do not offer the ultra light and the light model, "foreign suppliers are overrepresented in ultra light and light model."
The consultant concluded, however, overseas managers are no more expensive than their Dutch counterparts.
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