Tuesday, 25 April 2017

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    What are the priorities and challenges for independent trustees?

    The key stats and facts from Newton Investment Management’s Independent Trustee 2016 Research

    • The biggest challenges facing independent trustees’ clients are the persistence of low real yields (42%) and improving their funding levels (34%). This is unsurprising as independent trustees continue to attempt to tackle interest rates at historic lows, and volatile equity markets. In the 2015 survey, results were similar, at 36% and 38% respectively

    • The biggest challenges facing independent trustees’ clients are the persistence of low real yields (42%) and improving their funding levels (34%). This is unsurprising as independent trustees continue to attempt to tackle interest rates at historic lows, and volatile equity markets. In the 2015 survey, results were similar, at 36% and 38% respectively

    newton key findings

    • Professional trustees believe that the biggest challenges facing their lay trustee counterparts are having enough time to fulfil their role (37.5%) and keeping abreast of increasing regulatory demands (30.5%) and insufficient knowledge and experience (29%). Once again, increased regulatory complexity is seen as the main driver for increased use of independent trustees (24%). In the 2015 survey, this was given as the main reason for growth by 52% of respondents, but this year the split is more even with helping to resolve deficit issues cited as the main reason by 21% of independent trustees

    • When it comes to appointing a fund manager, investment expertise is still the most significant factor. Management fees was ranked 6th out of the 8 options, showing that independent trustees are focused more on value for money from investment managers, rather than simple the fees they charge

    To read the full research report, click here.

    • The jury is still out on whether the ongoing developments with LGPS are positive for the pension schemes. 35% of independent trustees said yes, 20% said no, and 45% were still undecided

    • Feelings are similar about whether the impact of a focus on fees will lead to a better outcome for LGPS members. 33% of respondents said yes, 26% said no, and 41% were undecided

    • 64% believe that the quality of advice provided by investment consultants is good or very good. Given the vital importance of investment strategy advice, it is worrying to see that this has dropped by 10% from the same survey in 2015

    • When asked the single thing that the schemes could do better, respondents ranked make decisions more quickly (27%), improve collaboration with the corporate sponsor (23%), improve investment knowledge (18%) and improve governance (18%) ranked most highly. Become more independent of the corporate sponsor, Pay less attention to their investment consultant’s view and pay more attention to their investment consultant’s view were at the other end of the scale

     

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