UK Pensions Unhappy With Consultants, Governance

Feel unable to take advantage of market conditions.

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british flag jubileeMany pension plans in the United Kingdom feel dissatisfied with their investment consultants and current governance structure, according to a 2013 SEI report.

The SEI survey polled 41 U.K. professionals overseeing pension plans ranging in asset size from £25 million (C$39.55 million) to more than £1 billion (C$1.58 billion).

Fifty-six percent of those feel that the governance system they now operate within prevents them from easily taking advantage of market conditions to increase their plans’ funding. The system limitations are mainly due to inadequate time or expertise, and these get in the way of timely and informed decisions, according to the poll.

The findings also reveal dissatisfaction with investment consultants among British pension plans. Almost one-third of respondents do not think their consultant offers value for the money spent, and there is concern in the pension community about lack of transparency around the expenses associated with traditional investment advisors. Those consultants are not fully accountable to pension plans and often charge separately for investment reviews, manager changes and ongoing support.

As a result, 65% of polled pension professionals plan to review their investment consultant within the next three years, and 28% intend to do so over the next 12 months. Twenty-one percent of respondents have used the same consultant for more than 10 years.

“The results of this poll confirm that pension trustees and professionals are operating in an extremely challenging environment,” says Ian Love, managing director of UK Institutional Business Development. “Faced with unrelenting volatility, mounting deficits and an increasingly fast-paced investment environment, trustees are starting to recognize that they may need a different model to meet their scheme-funding goals.”

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