Around 90 per cent of pension professionals cite transparency of performance and risk when selecting a fiduciary provider, Aon Hewitt has found.

According to Aon's Fiduciary Management Survey 2017, a further 85 per cent of respondents also look for transparency of costs and all fees from their fiduciary managers.

Of the key findings, Aon found that the importance of nimbleness has increased for pension schemes, rising from third place in 2016 to joint first in 2017. As a result of the complex solutions available to trustees and volatile markets, schemes are increasingly placing more value on fiduciary management to provide timely action, Aon noted.

Over half, 51 per cent, of the representatives from 235 UK defined benefit pension schemes surveyed signposted the ability to make swift and incisive decisions as a key advantage of fiduciary management. This was up from 37 per cent last year.

Aon's findings highlighted 2016's conclusion that DB schemes continue to "apply a high degree of rigour and diligence" in selecting and monitoring a fiduciary manager. This year's survey found that 73 per cent of respondents use due diligence and 68 per cent opt for beauty parades. A further 64 per cent noted a preference from RFPs and 42 per cent conducted site visits in order to assess fiduciary providers.

When asked what the top three valued qualities when selecting a provider are, trustees chose: a clear investment process, 52 per cent; a proven track record , 49 per cent; and investment experience, 42 per cent.

In contrast, 17 per cent said fees were a deciding factor, down from 24 per cent in 2016.

The survey also highlighted that the uptake in fiduciary management has also grown considerably over the last six years. On average 48 per cent of scheme now have a fiduciary mandate in comparison to 18 per cent in 2011. Of these using fiduciary managers, 98 per cent rate their experience as excellent, good or satisfactory.

In addition, 95 per cent of schemes rated transparency of all fees and cost as excellent, good or satisfactory.

Aon Hewitt senior partner and head of European Distribution Sion Cole, said: “The results of the survey are in line with what we are observing and experiencing in the market. With trustees more time-pressed than ever on investment matters - 73% spend just five hours or less a quarter on investment - the need for expertise has never been more evident.

“But the past year’s market volatility, mainly driven by uncertainty due to geopolitical events, has also demonstrated the benefits of daily attention and proactivity towards actively managed and therefore changing investment portfolios.

"It’s also pleasing that we continue to see trustees implementing robust and diligent assessment processes when they look to select a fiduciary provider."

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