Letter: Trustees as well as investment consultants must address weaknesses

clock
Letter: Trustees as well as investment consultants must address weaknesses

Rory Murphy, trustee chairman of the Merchant Navy Officers Pension Fund (MNOPF), says trustees must do more to share best practice in bid to improve outcomes.

Dear Editor,

I fully support any move by the regulatory authorities to improve clarity and competition in the investment consultancy industry, including the Financial Conduct Authority's (FCA's) decision to refer the industry to the Competition and Markets Authority.

However, it would be simplistic to pin the entire responsibility for any shortcomings on the consultants. The FCA's own academic research identifies a number of factors that can lead to trustees "being unwilling or unable to challenge consultants, and therefore to accept strategies they do not fully understand". As a pension fund trustee, I find this just as worrying as any weaknesses in the consultancy industry.

Many schemes have achieved great results by implementing a rigorous and effective governance structure, by challenging their advisors, and ensuring they are absolutely clear on every point when making critical strategic decisions. In striving for better outcomes, greater sharing of best practice among the broader trustee community could play as valuable a role as any regulatory intervention.

Ultimately, any trustee who fails to ask questions, or goes along with decisions without fully understanding them, is failing the very people whose interests are at the core of this issue - namely, the members of their pension schemes.

Rory Murphy is trustee chairman of the Merchant Navy Officers Pension Fund

More on US

US

TRS hands $6bn to KKR and Apollo, grows strategic partners programme

US - The Teacher Retirement System of Texas has agreed to issue $6bn combined to Kohlberg Kravis Roberts and Apollo Global Management expanding its strategic partnership programme to the private markets.

clock 08 November 2011 •
US

US investors returns negative in Q3

US - All US institutional investors performed negatively in the third quarter of 2011 with the median public, corporate and multi-employer funds down 8.94%, 7.94% and 9.03% respectively, Wilshire Trust Universe Comparison Service (Wilshire TUCS) results...

clock 08 November 2011 •
US

CalSTRS policy calls for political transparency

US - The California State Teachers' Retirement System (CalSTRS) has adopted a policy which puts pressure on company management teams to disclose their political contributions.

clock 07 November 2011 •
Trustpilot