Helen Morrissey finds that Trustee boards stand to gain a lot by adopting a more challenging stance with their advisers
At a Glance
•Concerns have been raised that trustees are not challenging their advisers enough.
•Advisers should be able to deliver key points of strategy in a way trustees can understand.
•Trustees should question whether the investment strategies they are put into are right for their specific scheme.
“Speaking at the Professional Pensions Defined Contribution (DC) conference, The Pensions Regulator’s executive director of DC Andrew Warwick-Thompson reiterated concerns that trustees may not be managing their advisers effectively”
Such an approach can also pay dividends when it comes to implementing new investment strategies according to Clerus founder Henrik Pedersen. Like Wilding, Pedersen believes advisers need to make it clear to their clients why certain investment strategies have been chosen as well as highlighting the conditions under which the strategy might come under pressure.
To read the full article from Professional Pensions please click here: http://www.professionalpensions.com/professional-pensions/feature/2426746/why-trustees-should-challenge-their-advisers
Stephanie Baxter finds there are concerns over how the performance multi-credit strategies is measured
“Multi-credit is the new buzz word for asset managers and consultants. They say these strategies help protect against future interest rate rises and still produce yield as the credit cycle comes to an end.., however strategies are typically benchmarked by a basic cash-like or Libor index, or more commonly cash plus 1%, 2%, 5% and so on..”
Clerus managing partner and co-founder Henrik Pedersen believes the use of cash-like benchmarks should be of concern to trustees as they do not reflect the risk in multi-credit: “Cash plus 3% seems very innocent but you’re potentially buying a time bomb.
He also argues that increasing the cash plus benchmark “doesn’t mean anything all” as it doesn’t show whether the manager has done well over a long period”
To read the full article from Professional Pensions please click here: http://www.professionalpensions.com/professional-pensions/news/2380200/is-there-a-problem-with-benchmarking-multi-credit
The report said: “This raises important professional and ethical questions around the integrity of investment benchmarks for fund managers. It also undermines basic performance assessment principles and leads to excess incentive fees being paid to these investment managers by the scheme and tax payers.”
To read the full article from Professional Pensions please click here: http://www.professionalpensions.com/professional-pensions/news/2374306/-accounting-trick-hid-gbp5bn-in-poor-performance-of-alternatives
A report released today finds that inappropriate benchmarks used by local authority pension funds and their advisers for alternative investments have artificially flattered performance, with its authors blaming a governance failure in the sector.
To read the full article from Pensions Expert please click here: http://www.pensions-expert.com/Investment/Study-poor-alts-benchmarking-hides-1.1bn-of-underperformance
LGPS schemes could make vast savings if they improved their governance, according to new research from CLERUS.
Bad advice comes at a price, and now that has been quantified.
LGPS schemes have suffered a loss of £17bn thanks to poor decision making over the last ten years, according to new research from CLERUS. The study found that the vast majority – more than 90% – of LGPS funds do not comply with the Myners Principles relating to good governance …
To read the full article from Pensions Insight please click here: http://www.pensions-insight.co.uk/bad-advice-costs-more-than-money/1474115.article
“Improving investment governance via the formal measurement of the performance of investment decisions and advice has the potential to yield significant results,” said Mr Pedersen.
To read the full article from FTfm please click here: http://www.ft.com/cms/s/0/e0c8f83c-db8d-11e3-a460-00144feabdc0.html#axzz32um5zJD4
There is a positive link between performance and governance for local government pension schemes, according to research conducted by Clerus.
To read the full article from Engaged Investor please click here: http://www.engagedinvestor.co.uk/positive-link-between-performance-and-governance/1474072.article