In this Towers Watson guide to fiduciary management, experts explore whether trustees should consider delegating investment responsibility and the common pitfalls to avoid
In the old days, trusteeship was about prudent management of financial affairs. Today, it’s so much more complicated than that.
To remain buoyant in turbulent markets, trustees must have the investment know-how of Warren Buffett, the diligence to wade through endless new regulation, and the energy to make sure it is implemented.
No wonder trustee boards are increasingly looking to delegate some responsibilities to the professionals.
As this report notes, only the biggest pension schemes can afford an in-house investment function. So what about the rest? Clearly it makes sense to delegate to experts.
There are two caveats. First, trustees should understand exactly what they are delegating. A fiduciary relationship can only be successful if each party understands what responsibilities they retain.
Second, trustees shouldn’t jump into a fiduciary relationship. A proper selection process is crucial.
It’s a great idea to educate yourself before you delegate. That’s why I’m so pleased to introduce this guide to fiduciary management, which has been produced by Towers Watson in conjunction with Engaged Investor.
Good luck with your fiduciary management search. I hope that this guide will prove to be a useful resource.
Download the guide here.