GLOBAL - Market turbulence has tested the viability of the traditional investment consulting model, a poll by SEI revealed.
The multi-manager and fiducary management firm said 58% of UK respondents felt "heightened investment risk has made trustees question whether or not the consultant model provides enough accountability for results". This compared to 34% globally.
The poll - which surveyed pensions executives in the UK, US, and Canada - also found a quarter in the UK and 23% percent globally had to proactively ask their consultant for advice during the turbulent market conditions.
SEI institutional group EMEA managing director Patrick Disney said: "Pension scheme decision makers continue to struggle to balance all the tasks required as a trustee body. As the poll reveals more than half of their pension-related time is spent on either administrative activities or the monitoring of investment managers, time which could be spent concentrating on strategic issues."
He added: "UK defined benefit pension schemes are facing even more serious issues than their counterparts in North America, with significantly more pension schemes closed and more impact on the corporate finances of the parent company."
In the UK 38% felt as a trustee body they had insufficient resources to perform necessary due diligence of investment mangers. This compared to 27% globally.
Almost half of UK respondents said they faced increased scrutiny from their sponsor - with 75% claiming the pension scheme was "a drag on overall finances".
Sponsor covenant risk was named as the most significant risk to the pension fund by 29% of respondents. Equity market risk and mortality risk were chosen by 25% and 21% respectively.
The survey also found that the most popular alternatives among the global group are property (46%), followed closely by hedge funds (43%). Nearly a third of the UK respondents said they were considering ‘other alternatives' such as timber or energy.
"This trend is likely to be a direct result of the credit crunch, as pension funds seek new ways of achieving returns outside of traditional equities," said Disney.
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