Median fiduciary management base fees rose by up to 14 per cent for smaller pension schemes in 2025, reversing the previous year's downward trend, according to IC Select.

The firm's Fiduciary Management Fees Survey 2026 found that median base fees rose by 14 per cent for schemes with £50m in assets, 5.3 per cent for £100m schemes, and 9.1 per cent for £500m schemes.

However, fees remained unchanged for schemes with assets of £250m, £750m and £1bn, with no reductions in median base fees recorded across any of the six scheme sizes surveyed.

The findings contrast with the previous survey, which reported declines in median base fees of between 6.3 per cent and 16.7 per cent, driven by increased competition and the introduction of lower-cost fiduciary management offerings.

Despite the latest increases, IC Select noted that base fees remained below levels recorded four years earlier across most scheme sizes.

The survey, based on fee quotations from 11 fiduciary management providers as at 31 December 2025, also found that smaller schemes continued to face the widest variation in prices between providers.

Indeed, the spread between the highest and lowest quoted base fees had widened to its greatest level since 2022 for schemes with assets of £50m, £100m, £250m and £1bn.

IC Select attributed the differences partly to the services included in individual mandates, highlighting the importance of manager selection and fee negotiation.

IC Select managing director, Peter Dorward, said: "After several years of falling base fees, this year's results show that pricing in fiduciary management does move, and that it moves differently depending on the size of the scheme.

"Smaller schemes saw the largest increases and face the widest spread of rack rates between providers, so the choice of manager, and what is included in the service, matters a great deal."

Meanwhile, median investment management fees increased by 4 per cent over the year, which IC Select attributed to greater portfolio complexity, increased exposure to private markets, and wider use of alternative investment strategies.

This followed a 17 per cent increase in the previous survey, although median investment management fees remained 20.3 per cent below 2017 levels.

The report also found that higher investment return targets were generally associated with higher fees, reflecting greater allocations to return-seeking assets and active management.

For £500m defined benefit (DB) schemes targeting returns of liabilities plus 2 per cent per annum, median investment management fees increased by approximately a third between 2022 and 2025.

The survey also highlighted the growing use of alternatives in higher-return portfolios, with average allocations doubling from around 8 per cent for portfolios targeting liabilities plus 1 per cent to 16 per cent for those targeting liabilities plus 2 per cent.

However, despite increases in both base and investment management fees, the median total fiduciary management fee for a £500m scheme targeting liabilities plus 2 per cent remained broadly unchanged from the previous year.

IC Select noted that aggregate fees had declined until 2023 before increasing materially in 2024, while the range between the highest and lowest total fees quoted had narrowed by approximately 50 per cent in recent years.

The firm also stressed that fiduciary management was not necessarily more expensive than traditional investment advisory arrangements, arguing that comparative costs should be assessed on a scheme-by-scheme basis.

It suggested that greater fee transparency would become increasingly important as DB schemes considered long-term strategies, including buyout and run-on.

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