Where will fiduciary management go next?

Tony Hobman: I would be surprised if the sort of trends we have seen do not continue; there will be further penetration across the market and continued growth in the mid-sized and larger schemes.

Along the way, I think there will be the imperative to resolve this issue of encouraging competitive tenders and ensuring that there is good monitoring of the process.

We do not know how the Financial Conduct Authority review is coming down to land. The Pensions Regulator says the skills that a successful investment consultant needs are not necessarily the same as those that a successful fiduciary manager needs in its recent guide to investment governance.

It is a bit coy on actually what those are, but I am sure that a debate will happen and, as everything becomes more clear, there is regulation or self-regulation.

Mark Davis: I think there will be much more growth. It will become even more accepted as a governance solution for schemes of all sizes rather than it just being for smaller schemes.

There will be more focus on independent selection, more focus on independent assessment of performance on an ongoing basis.

I think the growth will also then lead to even more competitive positioning for fiduciary as a service versus other governance models. This is a result of providers being able to drive, through extra scale, even lower fees.

That is a key aspect of the service; it is a consolidation mechanism that enables the fiduciary provider to have a larger pool of assets that they are responsible for, which means they can drive down costs.

It is going to be important to make sure that those cost savings are all being passed back to the underlying schemes; if they are, then that will act as a further reinforcement of the compelling nature of the proposition.

Sarah Leslie: What I would like to see from fiduciary management and what, as a provider, I would like us to help encourage, is more engagement with both trustees, corporates and the end member.

I think we have spent a lot of time in the industry talking our own language and between ourselves, and actually trying to get more buy-in from a much broader universe of people, more understanding, and generally just more engagement around pensions, is something I would like to see encouraged.

Neil McPherson: I think we have got to look at what it is going to replace. Penetration is increasing, as we said; I do not think it is anywhere near the 40 per cent that is said in the surveys, but back in the mists of time we had pooled managed funds covering the bulk of our small defined benefit funds, and diversified growth funds became the poster child of asset management as the way forward.

Their star may be falling, or it is certainly under question, and performance has dipped. Liability-driven investment has come in, nearly 60 per cent, and that is not going away; growth may be constrained by rates now, but those that have done it in the past are sitting quite pretty.

This whole question that has been in the pages of the FT and elsewhere, on whether active management is worth it compared with passive management, is germane to all this in what fiduciary management can do, because without fiduciary management, if it did not exist, what would your trustees be facing now in the current environment? Where do we put our money? How do we link to liabilities if we have got an index fund and an active fund?

So, I think it fits a very neat spot there and I do think the performance under current market conditions will prove the emperor has no clothes or will prove that it is the way forward, in that respect.

William Parry: When you look at a pie chart of where the mandates sit, categorising by legacy business, a huge chunk of it still sits within what were the large consultancy firms. I think that will change over time as alternative propositions develop.

That said, there have been instances where asset managers have jumped at this and then a few of them have actually folded. I know two asset managers that have been on shortlists and withdrawn themselves because they realised they just do not have the capabilities to run this.

I think the asset managers that are there now, and the specialists as well, are taking it really seriously, and the way they are going about it is very different.

You see the people from a consultancy background taking on more of an asset management style, because they realise that it is a hugely effective model that has done very well and it is one that has transparent fees, transparent risk exposures, transparent performance – and the market is learning from that.

As an embryonic market, fiduciary management is learning from the wider asset management way of doing things

Rikhav Shah: A lot of what has gone on so far about fiduciary management is really relating to investment governance; a lot of what will happen in the future is actually widening that to thinking ahead across the entire pension scheme risk management.

If you have a person that actually understands your actuarial risks, can that be brought into an integrated framework? That would become more and more important, particularly if you get into a very stressed position and you need to make very difficult decisions which could potentially pull investment companies in different directions.