Smaller fiduciary management (FM) mandates have declined over the past 12 months, as smaller pension schemes increasingly move towards endgame risk transfer transactions, Quantum Advisory has found.

Its latest quarterly FM Dashboard, published as part of its ongoing State of Play series, showed continued appointment activity at the larger end of the market, while smaller schemes have increasingly shifted focus towards their endgame options.

The update follows Quantum’s previous dashboard, which found that total assets under management in the fiduciary management market had increased by 58 per cent over the past three years, with around 90 per cent of that growth coming from schemes with assets of £1bn or more.

However, the latest update showed that, while large schemes continue to drive much of the market’s asset growth, smaller and medium-sized schemes are increasingly considering risk transfer transactions as funding positions improve.

Quantum Advisory principal investment consultant, Anne-Marie Gillon, said: “The FM market continues to see steady appointment activity at the larger end, with recent growth in assets under management driven by larger schemes moving to fiduciary or OCIO governance arrangements.

“Schemes with assets of more than £1bn account for 4 per cent of total appointments but around two-thirds of assets under management.

“By contrast, the number of smaller mandates has declined over the past 12 months as smaller schemes increasingly move towards endgame risk transfer transactions.”

The dashboard also found that improved defined benefit (DB) funding levels are influencing how FM arrangements are being used, with around four in five DB schemes now in surplus.

Quantum noted that this has contributed to a continued focus on portfolio stability and risk reduction, with investment approaches being adapted to target lower returns and protect funding positions.

At the end of Q1 2026, the majority of fiduciary mandates targeted a return of less than 1.5 per cent above liabilities.

Gillon added: “Improved funding positions are clearly influencing how fiduciary management is being approached.

“Lower return targets and high hedge ratios point to a market that is prioritising stability, protecting its funding levels and minimising the impact of volatility.

“This is a continuation of a trend that we have seen in previous editions of our quarterly dashboard; the deliberate and measured approach to de-risking for schemes to meet their long-term strategic objectives.”

The dashboard also highlighted a long-term increase in the number of risk transfer transactions for fiduciary mandates, reflecting the growing focus on endgame planning across the DB market.

However, Quantum said smaller and medium-sized schemes still need access to strong investment oversight, even where internal resources are more limited than at larger schemes.

“A well-defined fiduciary management arrangement can help schemes meet their governance obligations and keep their strategy aligned with their long-term goals without complexity,” argued Gillon.

“Regular reviews of fiduciary management arrangements are essential for trustees and scheme sponsors, helping ensure providers continue to understand scheme-specific needs, keep pace with market developments and support long-term journey plans,” she concluded.

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