Fiduciary Management (FM) is growing in popularity across schemes of all sizes, even the sub £50m. Whilst sounding an attractive option for trustees particularly of closed DB schemes on a de-risking journey. It can be a complex area to navigate as there are many different models and types of providers. And, to add to the mystic, providers call themselves different names such as delegated consulting, dynamic de-risking and so on.
KGC has built up a significant knowledge base through extensive research of the FM Market. We appreciate the benefits this type of model can bring to a scheme. However, it is important to gauge the reasons behind the move from traditional investment consulting and investment approach to the FM approach and the expectations of this model. Once we have this understanding, we will then take our clients through the intricacies of the different delivery models and provider styles.
Our understanding of the FM model allows us to take trustees through the due diligence process of determining if FM is actually right for them. We make sure they have the right knowledge on which to base their decision. If the decision is made to go FM, our extensive research into the providers’ governance structures, philosophies and operations enables us to match the right FM model and provider with our client. Once we have recommended a short list and agreed this with our clients, we follow our provider selection process tailored to the scheme’s individual circumstances.
‘From the start it was obvious we were in the hands of a professional team. We found working with KGC a pleasure – they are responsive, thorough and very clear in all they do. I would have no hesitation in recommending them’.
Lynne Turner, Secretary to the Trustees/Chair – C Brewer & Sons
Like all areas of maintaining a pension scheme, FM needs to be subject to scrutiny and good governance. In order to demonstrate good governance, our clients have asked to undertake monitoring services, these include:
- Transition and implementation review – did they do what they said they would
- Creation of a scheme specific framework for measuring – no two schemes are the same
- Application of the monitoring framework on a periodic basis – are they still doing what they said they would do?
From a governance perspective monitoring an FM provider isn’t just about hitting benchmarks and outperforming indices. It’s ensuring the provider adheres to its agreement and demonstrates its own internal due diligence, managing risk, following procedures and demonstrating good practice. We can ensure your providers do just that.
‘Working with KGC on our FM implementation review was a pleasure and quite painless. The KGC team’s expanse of skills and experience in every aspect of service provision, including risk management, reporting, trigger mechanisms and different delivery models proved educational to the Trustees who were new to this style of investment management We completed the project on time and within budget mainly due to the care, guidance and experience of the KGC team’.
Jane Healy, Pensions Manager – DP World