Recent growth in the UK fiduciary management sector has stalled, with asset values falling ‘significantly’ for the first time in more than a decade in 2022, IC Select’s latest annual survey of the fiduciary management market has shown.

It noted that, over the past five years, the market for fiduciary management has increased by 50 per cent in client numbers and by 16 per cent in assets under management.

However, in 2022, asset values fell by 24 per cent, which IC Select attributed to the rise in bond yields reducing the value of liability-driven investment (LDI) funds held by fiduciary managers.

Furthermore, client growth “stalled” in 2022, with a net increase of just three funds, as scheme buyouts and transfers to the Pension Protection Fund offset new funds moving to fiduciary management from advisory arrangements.

The research, which surveyed 13 fiduciary managers, also found that the Competition and Markets Authority (CMA) re-tender process was largely complete, with 80 per cent of schemes retaining their incumbent fiduciary managers.

Two-thirds (66 per cent) of schemes used a third-party evaluator to help them in selecting a fiduciary manager, down by 9 percentage points from the previous year.

IC Select found that 9 per cent of schemes that use fiduciary managers receive strategic advice from a third party.

Furthermore, only 34 per cent of schemes commissioned independent oversight, despite The Pensions Regulator urging schemes to do so.

The fiduciary managers that took part in the survey were: Aon, BlackRock, Brightwell, Cardano, Charles Stanley, GSAM, LGIM, Mercer, Russell Investments, Schroders Solutions, SEI, Van Lanschot Kempen, and WTW.

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