EUROPE – Only one in 10 pension funds would say they fully trust their asset manager, according to a straw poll conducted at the IPE Awards Seminar in Copenhagen yesterday.
Asked by session chair Amin Rajan, chief executive of CREATE-Research, 'How would you describe the present level of trust that pension funds have in asset managers?', only 10% said their level was 'high'.
Rajan noted that the same question was asked at a conference several years ago and the majority responded by saying they did not trust their asset managers.
While one audience member joked that lower fees often increased the level of trust funds had for their managers, panelist Peter Hansson, chief executive of Swedish pension fund SPK, was nonetheless surprised by the 59% of respondents who only said they had a 'medium' level of trust, while a quarter of attendants said their level of trust was 'low' and 6% said they did not trust managers at all.
Hansson said he himself had voted that trust in his own managers was 'high'.
"Otherwise, you should sack them," he said.
Rajan then asked if the trend of disintermediation had perhaps led to this lack of trust.
Niall O'Leary, head of EMEA portfolio strategy at State Street Global Advisors, noted that this was indeed a problem.
"For many asset managers, disintermediation makes it more difficult to engage with clients," he said. "That's not an excuse, it's a statement of fact."
He added that it made it difficult to gain an understanding of the solutions their clients wanted.
However, O'Leary added that internal research showed that it was outcome, rather than disintermediation, that fostered or damaged the level of trust.
Pascal Blanqué, global CIO at Amundi, meanwhile noted the difficulty in achieving these returns in the current market environment.
"Volatility will be volatile," he said, to much hilarity among attendees.
He also defended diversification as a useful tool, even now, but added that it would not always be successful.
"There are things you cannot diversify," he said. "You cannot diversify the end of the world, or the break-up of the euro-zone. But there are things you can diversify [against]."