By Ilonka Oudenampsen
Faster decision making and execution and focusing trustee time on strategic issues are some of the main benefits of hiring a fiduciary manager, according to respondents to a survey by Russell Investments.
At a poll conducted at the asset management company’s London Investment Conference 2012, 97 per cent of respondents saw speed of decision making and execution as an advantage of using a fiduciary manager. Focusing trustee time on strategic issues was mentioned by 90 per cent of over thirty European pension fund trustees and other institutional investors, and 80 per cent named reducing the governance burden on trustees.
Improved risk management and increased investment diversification and sophistication were mentioned by 87 per cent and 83 per cent respectively.
Russell Investments head of fiduciary management in the UK Heath Mottram said: “We have been working with clients on governance structures for over 20 years and we’d argue that the critical component of delegation is the ability to execute decisions effectively. In this current market of volatility and low returns, the ability to be nimble is essential to capitalise on opportunities.
“Trustees understand the importance of good governance, but they can underestimate the time it takes to achieve it, and the practical challenges of implementation. The majority of investment committees today are ‘watchdogs’ rather than ‘executioners’. Fiduciary management can therefore add real value by enabling faster and more effective decision making and execution.”