Pension Clients Sleepwalking into Fiduciary Management - Plenum Group
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The document discusses concerns about asset managers converting advisory clients to fiduciary clients without transparency in the process, referred to as 'sleepwalking into fiduciary management.' There is a growing trend where asset managers actively seek to transition their existing clients to fiduciary mandates, raising questions about conflicts of interest. The discussion highlights complexities in client relationships and the challenge of ensuring open and transparent tender processes amidst a highly competitive market for UK legacy defined benefit assets.
Pension Clients Sleepwalking into Fiduciary Management - Plenum Group
- 1. www.theplenumgroup.com Are Asset Management Clients Now “Sleepwalking Into Fiduciary Management” ? The consulting community has long been criticized by asset managers for the way it converts its advisory clients into fiduciary clients. Asset managers (joined by some vocal consultants who do not provide an implemented consulting or fiduciary service) have suggested that many pension clients are “sleepwalking into a fiduciary arrangement” without the benefit of a transparent tender process. This issue is fiercely debated and unlikely to go away anytime soon, but the phenomenon that receives less attention is the growing trend of asset managers who may have adopted an attitude of “if you cant beat them join them”. Many are said to be actively seeking to convert their back book of clients into fiduciary mandates. As any business developer will tell you, it is much easier to secure a meeting with an existing client than it is a new prospect. Some commentators have suggested that a leading asset manager (with leading fiduciary offering) has been making a concerted effort to ensure a conversation about its fiduciary proposition is incorporated into the regular meetings held with its existing pool of pension clients. We are yet to be told of an example where the asset manager’s steadfast belief in open and transparent tenders has prevented it from simply migrating an interested pension client across to a full fiduciary service. Furthermore, some cynics have suggested that some LDI schemes have deliberately been made so complex so that once on board, clients will be reluctant to (or unable to) unwind the relationship. Regardless of the potential rights and wrongs of various approaches to securing clients, with one trillion of UK legacy DB assets to fight over, it looks like we’ll be discussing conflicts of interest for some time to come…….. To discuss further please contact TC Jefferson tcjefferson@theplenumgroup.com or Angus Henderson ahenderson@theplenumgroup.com Originally published by The Plenum Group www.theplenumgroup.com Plenum 2013 – Financial Services Executive Search