Pension scheme trustees rushing to meet the Competition and Market Authority's (CMA) June deadline for the retendering of fiduciary managers could risk cutting corners, resulting in poorly negotiated fees and inappropriate mandates, Hymans Robertson has warned.

The provider emphasised that trustees making retender decisions solely based on time pressures could risk undertaking the process without a full commitment, potentially leading to poor outcomes for schemes.

Considering this, it emphasised that the assessment of the mandate and strongly negotiated fees must be done “thoroughly”, arguing that this can result in a “significant saving” of up to 30 per cent.

Hymans Robertson senior investment consultant, Samora Stephenson, commented: “The purpose of the CMA’s deadline is for schemes to ensure that fiduciary management provides value for money for pension schemes, while at the same time demonstrating good governance.

“We are concerned, however, that schemes could be heading into the process without advice as they rush to ensure compliance.

“A rushed process risks missing out on the best fees and not properly testing whether requirements have changed since mandates were set up.

“Schemes must ensure they don’t put speed first to make sure this isn’t a wasted opportunity to have the best fees and the most appropriate mandates.

“We believe that savings of up to 30 per cent, a significant saving, can be made with a thorough and professional negotiation process if it is done properly.”

In light of this, Stephenson suggested that for trustees who want to avoid making decisions in haste ahead of June, fiduciary management tendering needs to be “at the top of their agendas”.

“We urge schemes to ensure that they put full effort into the process and if needed seek help and guidance from advisers for their schemes, regardless of the pressing deadline,” he concluded.

The provider also previously encouraged trustees to act sooner rather than later on fiduciary manager retendering, amid fears that the deadline could prompt a potential capacity crunch.

Share Story: