UK - A significant number of UK fiduciary managers would consider capping annual performance fees to limit the cost to clients, according to a survey by KPMG.

The consultancy also noted that the large majority of fiduciary mandates were for implemented consulting, with nearly two-thirds of assets under management supervised by third parties this way, accounting for 70% of the market.

In its 2011 Fiduciary Management UK Market Survey, KPMG also estimated the existence of more than 200 fiduciary mandates in the country, based on responses from 12 managers active in the market.

Recent research conducted for IPE's October issue confirmed these figures, with a survey of 10 fiduciary managers active in the UK reporting more than 340 institutional clients, many of these pension funds.

Patrick McCoy, pensions partner and head of investment advisory at the consultancy, said the market was now emerging into a "more mature growth phase", with mandates totalling around £40bn (€46bn).

"Our survey finds a wide variation in how performance, as well as the success or failure of fiduciary management, is measured," McCoy added.

"This makes the establishment of market benchmarks and comparators difficult. Therefore, while the industry uses performance fees to a large degree, there is no consistent definition and application of performance fees."

He added that he expected fiduciary appointments to occur via tender in future, also predicting that there would be a rise in independent advisers overseeing the managers on behalf of schemes.

In the survey, KPMG said: "The majority of FM providers surveyed supported the appointment of a third-party independent adviser - citing reasons of independent assurance, client comfort, enhanced expertise and experience and a valuable element of challenge or sense-checking on decisions made."

However, the survey noted concerns by some managers, which questioned whether additional advice was needed that could not be provided by current consultancies.

It suggested that some pension funds were likely to be uncomfortable with the additional layer of cost afforded by such oversight.

It also found that independent advisers were most common in cases of full delegation, rather than partial, as well as when the provider was an investment manager rather than an implemented consultant or specialist provider.

In June, the Merchant Navy Officers' Pension Fund appointed Hymans Robertson as independent adviser to "monitor and challenge" the actions of Towers Watson, appointed in October last year as a delegated CIO for the £3.3bn scheme.