OVERVIEW

Since 2008 the global economy has seemingly lurched from one crisis point to another. Banks' toxic debt, rising yields on bonds and political uncertainty have all contributed to market fluctuations. Increasingly complex investment techniques and policies are required to improve funding ratios in such austere times. Pension schemes have always invested for growth but when the markets are so wary a more dynamic strategy is needed to allow for such fluctuations. Currently, there is renewed focus on investment policies and developing portfolios that can reduce risk while maintaining return potential. Given the constant regulation of pension schemes and complexity of investments it is little wonder that the skills and expertise of fiduciary managers are now on the rise.

Rather than the traditional approach to pensions funds, where typically only one aspect of the scheme is managed in isolation, the likes of fiduciary management and delegated consulting are offering trustees a fuller service, with comprehensive solutions, that can help improve funding levels through daily risk and return management. Specialist investment teams can take on expert decisions that would otherwise be typically protracted by delayed decision-making at biannual trustee meetings. Solutions are managed in line with guidelines agreed by the trustees, enabling greater overall control, ensuring additional value is added to schemes and a more cost-effective strategy can be delivered. Each component of investment arrangements can be evaluated and fed back to see how the strategy is performing relative to the long-term plans, it is vital that the flexibility is in place to allow for strategic decision-making from both parties. By clearly identifying roles and responsibilities from the outset trustees can gain greater control over their scheme and result in improvements to investment performance.

The idea of trustees passing over responsibility for investment to a third party is not without drawbacks. Fiduciary services and solutions can be an expensive cost and fees are not always easy to understand. Even active asset management, alongside consultancy agreements, might not match up to the expectations and perceived costs of a fiduciary service. It is vital for trustees to secure value for money and that guidelines are fit for purpose. Investment management fees should be reduced through economies of scale and total costs should come down. Ultimately, success can be determined through the funding level of the pension scheme and whether it rises or falls.

At Fiduciary Management, Liability Driven Investment and Risk our expert programme of speakers will outline what needs to be in place to ensure a scheme's funding strategy is successful, explain how to design a risk-management framework that works for you and explore how value for money can be best achieved. Delegates will gain invaluable insights into liability driven investments and how funding levels can be improved through new frameworks, more efficient strategies that factor in risks and returns more effectively.