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Poll shows gap between perception, 'reality' of fiduciary management

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  • Poll shows gap between perception, 'reality' of fiduciary management

EUROPE - A poll by Russell Investments has shown a gap between pension fund trustees' perception of fiduciary management and the "reality" of the approach.

Two-thirds (67%) of participants in a recent conference organised by the asset manager said the perceived reduction in "trustee control" was a barrier to their use of fiduciary management. 

Russell - which is itself a fiduciary manager - said this figure was in "stark contrast" to the 97% of respondents who saw speed of decision-making and execution as the main benefits.

Heath Mottram, head of fiduciary management at Russell, said: "There is obviously a perception among those who currently don't use a fiduciary manager that they will relinquish control of their scheme."

To the question of whether an independent third party should be used in selecting a fiduciary manager, 35% of respondents strongly agreed, 39% agreed and 26% disagreed.

Similarly, when asked whether an independent third party should be used to monitor a fiduciary, 32% strongly agreed, 42% agree and 26% disagreed.

Mottram said he was "slightly surprised" that a quarter of respondents would not automatically seek independent support when making such a decision.

"Selecting a fiduciary manager is an important decision, and one which requires thought and due process," he said. "There are many differences between what different providers in this space offer, and the appointment of an independent third party when selecting and monitoring the performance of a fiduciary manager would be a sensible step to take for many."

The poll was conducted at Russell's 2012 Investment Conference in May, with more than 30 pension funds and other institutional investment schemes participating.

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