Fiduciary managers and outsourced CIOs have upped their game with 99% of their UK clients responding to an Aon Hewitt survey saying they were at least satisfied with their experience.
In the consultant’s survey last year, 87% said this was the case.
This year’s figures echo those in CIO’s 2014 Outsourced Chief Investment Officer (OCIO) Survey, which showed 100% of 191 international investors were at least satisfied with the service they received.
Some 26% of Aon Hewitt’s respondents from 93 UK pensions said their overall experience was excellent, with the largest proportion (56%) saying it was good. Just 21% said their funding level/performance was excellent, however, with 50% preferring to class it as good.
For 2014, the consultants added “excellent” as a new category, making year-on-year comparisons difficult, but the level of respondents saying their funding level was unsatisfactory fell from 6% in 2013 to 3%.
The survey also showed a doubling in the level of uptake in fiduciary management over the last three years in the UK, with 37% of respondents having a fiduciary solution in place—up from 18% in 2011.
However, Aon Hewitt said trustee interaction with investment decisions had declined since the last survey, due to the uptake and satisfaction with their outsourcing arrangements. This point was flagged as a concern by experts talking to CIO for a major feature on outsourcing, published last year.
“People who outsource their investments need to realise that it’s not just a way of getting rid of a pension fund problem,” said Patrick Groenendijk, who led the Dutch €10 billion Vervoer Pension until February, when he joined Northern Trust’s OCIO business as a senior client investment officer. “It can never become someone else’s problem—and the regulator needs to know that you still understand all that is going on.”
Vervoer’s team grew from two to seven after appointing a fiduciary manager. Groenendijk beefed up risk controls and other functions the pension had never needed before just to better oversee the new processes being brought in to their investment strategy.
Related content: 2014 Outsourced Chief Investment Officer Survey & Revolution – How investment outsourcing needs to change—or unravel.