Richard Butcher, managing director at PTL, gives his view on the independent trustee market in the first of this four part series
Five or ten years ago the defined benefit market was relatively soft. There was an opportunity to become an independent trustee and to win a reasonable portfolio of appointments. The market has not exactly saturated, but the penetration of independent trustees into the marketplace has risen very significantly over the last seven or eight years, and as a consequence there aren’t that many independent trustee jobs around.
So what is it that helps somebody to crack it? Well, for a start pensions is a long term game, so I think anybody who wants to add value for their client has to see trusteeship as a long term project. It can’t be something that is done for the last five years before you go home and absolutely retire.
Secondly, the standards expected of independent trustees are rising all the time, so the person who thinks they can set themselves up as a dining room trustee – somebody who works from home with one or two appointments without any support or network around them - is slightly misguided. We have to provide quality controlled service which is subject to peer review, with resources backing us up.
[When recruiting for a trustee board] you have to make sure they are people who are pragmatic, sensible level headed people with some familiarity – if not with the concepts then at least dealing with numbers, and often quite large numbers. They need to be people that can be worked with by the rest of the trustee board and also, frankly, the employer, because the sponsor’s a key part of the delivery of a scheme’s objectives.
The role of the chair
The chair’s role is underestimated by a lot of people. The chair has a very significant role to play. He sets the agenda for the entire trustee board. In many respects the chair needs to be the “uber” trustee. He has to have all of the positive characteristics of a trustee, but magnified ten times. So he needs to be much more pragmatic than the other pragmatic trustees. He needs to be much more personable than the other personable trustees.
My view is that the chairman of the trustees needs to be somebody who has an understanding of what’s going on, because it’s only that way that they can steer the agenda in an informed way. They need also to be collegiate to consider also the needs of their members – the members of their board. It’s really quite an underrated skill – being the chairman of a trustee board, and there are an awful lot of trustee boards who don’t rate it particularly and just install anybody, whether they’re the most senior person or just somebody who volunteered for it. Then you end up with meetings that are running without a narrative, and being dreadfully chaired.