Instead, unprecedented volatility and insecurity confirmed impressions of this century as an era of acute investment uncertainty. Add increased complexity brought about by changing regulations and accounting rules, and there seem more than enough reasons for enhanced risk management and governance services, such as those provided by fiduciary management.
Fiduciary management involves outsourcing the daily management of a pension scheme to an external partner with a high degree of transparency so that any decisions can be scrutinized, while control is retained by the trustee board.
Services provided can include everything from asset management, administration, risk management, actuarial services to distribution. The approach was pioneered during the past decade in the Netherlands, one of the world’s most sophisticated pension markets, but it is only now being slowly adopted in other countries.
A survey released by Allianz Global Investors in the first half of 2011 explored the demand for and issues facing fiduciary management services in four European markets: the Netherlands, plus the United Kingdom, Switzerland and Germany, where fiduciary management is in the early stages of adoption. Together, these four countries make up 86.6 % of the pension assets in western Europe (download the paper from PROJECT M research).