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Special Report

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Half of Dutch funds mull fiduciary move - KPMG

NETHERLANDS - Almost half of Dutch pension funds are considering transferring their investment management to fiduciary managers, a study by accounting firm KMPG has found.

Extra administrative and management burdens due to increased complexity in investment management, together with a lack of the necessary expertise, are the most important reasons for them to look at fiduciary management.

KPMG's annual survey of 100 pension funds found that "continuity of the organisation, the demands of the regulator with regards to risk management and the growing emphasis on strategy and policy make fiduciary management necessary".

KPMG Financial Services' pension head Edward Snieder said it was "striking" that it is also the large pension schemes that are considering the switch to fiduciary management.

"Around 70% of the larger funds indicated they possibly want to switch," he said.

"It is a sign that the complexity of investments of the large funds is substantial and that also these funds have a need for external expertise," he added.

Though there is enthusiasm for the external management, the study also established that 40% of the funds that took part in the survey have doubts if they have enough influence on the fiduciary management.

Hence it needs to be made clear if the fund will remain in charge of the activities that will be done for the scheme, KMPG argued: "A pension fund cannot and should not be allowed to transfer all responsibilities. A fiduciary manager can take operational decisions, but the board remains in charge of strategic decisions."

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