UK - The former CIO at Strathclyde Pension Fund has launched his own consulting business, hoping to aid local government pension schemes (LGPS) in improving voting procedures and cutting costs through the use of framework agreements.

David Crum, until recently an investment consultant at Aon Hewitt, said he hoped his new business, 330 Consulting, would be able to assist local authority schemes in reducing costs and ensuring managers tailored any tender proposals to meet the requirements of the funds precisely.

Crum added that he hoped to tap into a need for "consulting lite", as well as driving forward initiatives deemed of benefit to LGPS.

One issue highlighted by the Scot was the way custodians often cared for pension fund assets, a topic he became familiar with while head of the UK custody team at the consultancy and during his time at Strathclyde.

He said that during manager searches, funds would often raise issues of custody and voting.

"It seems to me that nothing has really moved on since Lord Myners did his review," Crum told IPE, noting that many custodians preferred to keep pension assets in omnibus accounts, although this could pose problems during voting.

"If you over vote an omnibus account, then the whole number of votes you submit are rejected, so there is a real danger that clients are actually losing their votes to errors at the custodian level," he added, noting that he was unaware of any custodian that currently reported back on the matter.

Crum, who in addition to his time at Strathclyde was employed by Lothian Pension Fund for seven years, said it was important to establish an audit trail to be clearly followed.

"All the effort and focus goes on actually making sure the voting intention is submitted," he said. "People relax a bit once that has been done."

In light of increasing shareholder resistance to remuneration packages, with opposition most recently leading to the resignation of Aviva's chief executive, he said investors were eager for their voices to be heard, but this was not the case in every instance.

As a solution, Crum instead urged pension funds to request designated custodian accounts, circumventing the problems potentially posed by the omnibus approach.

He added that, in addition to movement on voting procedures, an area he would like to see develop was the use of framework agreements - which he viewed as an alternative to the proposed pooling of all local authority assets in London LGPS.

Successful framework agreements, covering the procurement for a number of funds, include one launched by the Environment Agency, as well as several local government schemes based in the South West of England.