Governance Framework & Due Diligence
We have built up a significant knowledge base through our extensive research of the Fiduciary Management (FM) market. It can be a complex area to navigate, as there are many different models and types of providers. As investment advisory and FM comes under closer scrutiny by regulatory bodies, the pressure on trustees is also increased to ensure they demonstrate due diligence and good practice.
From a governance perspective, monitoring a 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 good operational processes and demonstrating good practice. Without these, your de-risking journey will be a bumpy ride. A KGC Monitoring Framework© addresses all these points, highlighting any recommendations to ensure you meet your governance requirements.
If the assessment takes place shortly after implementation, we will carry out an initial transition and implementation review. This interrogates the robustness of the asset transition, reporting structure, cost and fee framework (FM and funds), budgetary control and processes. As well as identifying if any factors arose during the transition which could have impacted on the scheme.
We then create a scheme specific KGC Monitoring Framework© which forms the basis of the scheme’s individual assessment going forward. In assessing FM, the results take the following broad areas into consideration:
- Compliance, oversight and risk
- Leadership, business and management expertise
- Consistency of service delivery and its adherence with expectations
- Process strength and adaptability
These are inspected through assessing individual aspects of the business that enable the FM to deliver its service and the evidence metrics that demonstrate its ability over time.
‘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