Professional trustees are quickly becoming the new normal, LCP has said, after its annual survey found that just over half (51 per cent) of UK pension schemes have a professional trustee, of which a quarter have appointed a sole trustee.

LCP found that there has also been a 'step change' in the number of sole trustee appointments, with a 30 per cent rise in the past year alone, doubling in numbers.

This marks the first year that the balance has shifted towards professional and sole trusteeship since the launch of LCP's annual professional trustee survey in 2021.

According to the survey, the increase in professional trustee appointments means that five professional trustee firms now hold 90 per cent of the DB assets covered by the survey.

LCP said that it expects this trend to continue, highlighting the strong recruitment growth by the firms over the past four years as evidence that there is "no slowdown" in growth, with over 190 people having joined professional trustee firms since June 2023.

Professional trustee firms are also evolving their offerings amid the increased demand, as LCP found that some firms have evolved their capabilities to address the fact that schemes are increasingly looking to outsource more services.

Alongside this, LCP said it has seen an increase in streamlined sole trustee offerings to meet the growing demand for efficiencies, with these solutions going beyond governance, covering scheme services and, in some cases, investment management, to offer a cost-effective option for smaller schemes.

However, LCP suggested that, as the professional trustee market continues to transform, more involvement from The Pension Regulator (TPR) could be seen.

LCP partner and head of strategic pension relationships, Nathalie Sims, said: “This year’s report comes at a crucial time as the pensions landscape rapidly evolves through increased growth, new government reforms and interest from The Pensions Regulator.

“Following another year of significant growth in the Professional and Sole Trustee sectors, the focus is now on how the industry will adapt—with accelerated growth, demand for streamlined offering, and greater oversight from The Pensions Regulator shaping the future.”

Adding to this, The Pensions Regulator chair, Sarah Smart, said: “We welcome the valuable insight provided by this, and other, surveys into the development of the professional trustee and sole trustee market.

"We recognise the risks and opportunities presented by the development of the market and the various ownership models: the potential for higher standards and greater assurance as well as the concentration of decision-making in the hands of a few and detaching decisions from the membership.

"As set out in our Corporate Plan, we will continue to target our approach to the market in a strategic way, with savers’ interests at the heart of our approach.”

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