Pace of fiduciary management searches in U.K. slows – KPMG



Fiduciary management searches in the U.K. slowed in 2018, growing 9% to 862 in the 12 months ended June 30, according to KPMG’s annual U.K. Fiduciary Management Survey.

That is the lowest level since KPMG began tracking the fiduciary management market in 2008. Last year’s survey showed a 30% increase in searches.

Assets under fiduciary management in the U.K. increased 5.2% to £142 billion ($184 billion) up from £135 billion a year earlier.

Independent advice was used in selecting a fiduciary manager 66% of the time in 2018 up from 60% a year earlier, KPMG said. But only 21% of pension funds use a third party to review their fiduciary arrangements on an ongoing basis, up from 19% in the year-earlier survey.

A Competition and Markets Authority review of the consulting market this year “is probably a key factor with some pension scheme trustees adopting a ‘wait-and-see’ approach while the investigation into investment consultancy and fiduciary services was carried out. It now seems likely that U.K. fiduciary managers will not significantly change their investment offering to pension schemes as a consequence of the CMA review — so this year may represent a blip rather than a signal for lower growth rates in the long term,”Anthony Webb, head of fiduciary management research at KPMG in London said in a news release on the survey results.

Some 42% of 350 surveyed pension funds showed no environmental, social and governance-related discussions between fiduciary managers and trustees. This compared to 44% of asset owners that conducted a light review and 14% of pension funds that considered the subject thoroughly.

Faye Mullen, assistant head of fiduciary management research at KPMG, said in the release: “There is room for improvement in how trustees and their fiduciary managers engage on environmental, social and governance issues. There is increasing attention on how ESG policies are managed within pension scheme investment strategy, including new requirements for trustees that were recently set out by the Department of Work and Pensions. Trustees, with help from their provider, will be encouraged to demonstrate greater ESG engagement in future, and we look forward to seeing how fiduciary managers help their clients tackle this.”

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