We need to make sure that professionalisation of trusteeship doesn’t lead to a Westminster-style pensions bubble, argues Nick Boyes, independent trustee and director of Able Governance
The navel-gazing over our place in Europe has concluded. There is a danger, however, that the political fall-out of the Brexit referendum will overshadow the impact of the actual result itself.
Although Brexit will have far-reaching consequences, the attention of the media has been drawn to the leadership battles that are raging on both sides of the political divide. Had I read more Shakespeare or watched Game of Thrones, I’m sure that there would be lots of clever analogies that I could make. The best that I can conjure up is to regret that the dashing of Boris Johnson’s leadership ambitions by the ‘Machiavellian psychopath’ Michael Gove will deny us another ‘Boaty McBoat-face’ election opportunity.
Part of the problem may be down to the way in which our political leaders are cultivated. The public school, Oxbridge educated politicos have a bit of a stranglehold on the system. This can lead to an element of ‘group-think’ and a sense that they have at best a tenuous awareness of the challenges and struggles of the electorate. This is a sweeping generalisation, of course, and many MPs are very engaged with their constituents, and get little credit for their efforts.
Would it help if there was a professional qualification that prospective MPs should be required to acquire”
Would it help if there was a professional qualification that prospective MPs should be required to acquire before they take on the onerous duties of running the country? This may help to raise the standards of governance, but may also act as a barrier to entry to those who have a great contribution to make, but have not pursued the same route up the slippery pole.
There are (admittedly tenuous) parallels between the governance of the nation and the governance of a pension scheme. Both scenarios require a small group of people to make decisions that will affect the lives of the many. Neither activity requires any formal qualifications to prove that they have the necessary skills or attributes to perform the role.
In an attempt to address this, the Pensions Management Institute and the Association of Professional Pension Trustees have concocted a new qualification for professional independent trustees designed to separate the serious players from the wannabees. Consultation has begun.
It does seem anomalous that there is nothing to stop anyone deciding to offer their services as a professional independent trustee: no formal qualification, no entrance exam, no test of any kind to stop the unsuitables from seeking and accepting appointments. Once in position, however, the professional trustee is subject to the same legal and fiduciary duties and obligations as any other trustee.
It does seem anomalous that there is nothing to stop anyone deciding to offer their services as a professional independent trustee”
Indeed, the Regulator would expect a higher level of knowledge and skill from a professional as compared to a lay trustee, regardless of their experience and qualifications. It is usually the sponsoring employer who has the power to appoint trustees, so there is an element of caveat emptor in play to prevent someone clearly incompetent from making disastrous mistakes.
I’ve been within the independent trustee world for almost a quarter of a century and have always considered it to be a bit of a cottage industry – small pockets of activity scattered around the country, with no industry-standard processes and systems, but all operating within the tight strictures of the legislative and regulatory framework. This results in a well-diversified gene-pool of talent, and a choice of approaches from which a professional trustee can be drawn.
Will the imposition of a mandatory qualification lead to the professionalisation of the industry? It may do, but we should beware creating barriers to entry that could result in the creation of the trustee equivalent of a Westminster bubble.
Nick Boyes is an independent trustee and director of Able Governance