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UK pensions to review investment consultants
23 July 2013
A new poll reveals majority of UK pension schemes are unhappy with governance structures
An overwhelming majority of UK pension schemes are planning to review their investment consultants, according to a new poll by SEI.
Some 30% of respondents did not believe that their investment consultants offered value for money. Almost two-thirds of schemes said they were planning to review their investment consultants over the next three years, and a further 28% said they would carry out the reviews over the next 12 months.
The poll revealed that some pension trustees believed there was a lack of transparency around the costs charged by traditional investment consultants who “often charge separately for investment reviews, manager changes, and ongoing support, and who are not fully accountable to the scheme”.
More than half of UK pension schemes are dissatisfied with their governance structures. They said their current governance structures did not allow them to easily take advantage of market conditions to raise their funding levels, and that lack of resources meant that many trustees were unable to make informed and timely decisions.
Ian Love, managing director of UK business development, said: “The results of this poll confirm that pension trustees and professionals are operating in an extremely challenging environment.
"Faced with unrelenting volatility, mounting deficits, and an increasingly fast- paced investment environment, trustees are starting to recognise they may need a different model to meet their scheme funding goals.”
The poll was conducted in April and involved 41 UK pension professionals. However, none of the participants were clients of SEI.