Growth in the professional and trustee market has slowed to its weakest pace in five years, with analysis from LCP revealing that the overall number of professional trustee appointments over the past year increased by just 2 per cent.

Preliminary findings from the consultancy’s annual professional trustee and sole trustee market review showed that there were more than 100 new sole trustee appointments in the past 12 months, although nearly half were awarded to just three firms.

In addition to this, more than 1,200 sole trustee appointments are currently held by only 224 individuals, a concentration LCP warned could increase concerns over decision-making being in the hands of a small pool.

The slowdown in growth stands in contrast with last year's report, which found that there had been a 'step change' in the number of sole trustee appointments, with a 30 per cent rise in 2024, doubling in numbers.

And whilst LCP highlighted last year's "bumper" recruitment growth by professional trustee firms as evidence that no slowdown was likely, the latest report showed that hiring across trustee firms has now returned to a more sustainable level.
 
Given the drop-off in growth, LCP suggested that the industry could be seeing signs of a market hitting maturity, noting that, as a result, competition in the market is intensifying, with firms increasingly differentiating on value proposition, experience, and specialism to retain market share.

In addition to this, LCP said that it is expecting heightened scrutiny, more detailed guidance and potentially new legislative guardrails following the Department for Work and Pensions’ consultation on scheme governance and trusteeship, due in autumn 2025.

“The maturing market and increasing regulatory oversight, combined with other market developments such as changes in rules around surplus sharing, means that the professional trustee market is standing at the threshold of a whole new world,” LCP head of strategic pension relationships, Nathalie Sims, added.

The research also highlighted a shift in market dynamics, with sole trustee models increasingly adopted by larger schemes, including those with assets exceeding £1bn.

Cost savings, the need for expertise on major projects, and faster decision-making were cited as the main drivers, alongside demand for alternative governance solutions to support operational consolidation.

Services are evolving to meet this demand, with the majority of professional trustee firms now offering sole trustee propositions that extend beyond pure trusteeship, most commonly providing secretarial or governance support.

LCP head of sole trusteeship, Holly McArthur, commented: “As the number of sole trustee appointments continues to grow, so too does the importance of understanding how those appointments are delivered in practice.

"There is no one-size-fits-all approach and the right model depends on the scale, complexity and objectives for the scheme.”

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