Pension boards and trustees are opting for fiduciary management because they can often only spend five hours each quarter scrutinising investment decisions, according to Aon Hewitt.
The consultancy said the increasing complexity of investment decisions was driving those in charge of pension assets into the arms of fiduciary managers, but that only one-quarter of those using such providers were employing indices to measure successful performance.
Drawing on the results of a UK survey of nearly 360 investors worth £269bn (€344bn), the Aon Hewitt Germany’s head of investment consulting Thorsten Köpke said the questions facing UK investors were also relevant concerns for their German counterparts.
The survey also found that 73% of pension boards and trustees were only spending five hours a quarter on investment decisions, a 10-percentage-point increase over the 2013 survey results – meaning they placed significant trust in managers to monitor investments, according to the consultancy.
However, interest in fiduciary management was largely dependant on the size of a fund’s portfolio, the survey found.
It also found that those managing more than £1bn in assets were more inclined to delegate responsibility for only part of their portfolio, while those with less than £500m in assets delegated the entire portfolio.
Köpke added: “The last few years have seen occupational schemes in Germany as in England – both small and medium-sized ones – work with fiduciary managers.”