Big 12 professional trustee firms see 20% annual growth

Trustee firms say market akin to a ‘land grab for clients’ as number of appointments soar

Jonathan Stapleton
clock • 2 min read
Isio's Mike Smedley: It’s important that the public know who these professional trustee firms are and have confidence in them
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Isio's Mike Smedley: It’s important that the public know who these professional trustee firms are and have confidence in them

The number of independent trustee appointments continues to grow substantially, with the 12 largest trustee firms posting a 20% increase in revenue over the past 12 months, research from Isio reveals.

The consultant's 2022 professional independent trustee survey - which will be published tomorrow (20 April) ­­- found the biggest 12 firms now represent 2,000 pension funds and over £1trn in assets, with over 200 new appointments in the past year alone.

Isio said it is estimated that 60% of pension schemes now have a professional independent trustee, a number that is predicted to rise to around 90% over the next five years, adding that an increasing number of employers were also opting for a sole corporate trustee model - replacing the entire trustee board with a professional trustee firm.

It said the growth was so spectacular that one of the 12 firms that took part in the survey said that the market is akin to "a land grab for clients".

Isio added the growing influence of professional trustees and the sheer volume of assets they control puts the spotlight on an industry that, despite its astonishing power, was relatively unknown - noting there may start to be pressure for more supervision of a sector which is largely unregulated.

Isio partner Mike Smedley said there was "a quiet revolution" happening in the pensions industry as professional trustee firms grow rapidly - noting that traditional pension fund boards made up of company and member representatives now seemed to be in "terminal decline".

Smedley explained: "Professional trustees are helping to raise the standards of pension fund governance - bringing their expertise and market knowledge. And the door is wide open for them, as many employers struggle to find trustees in the face of growing regulation and responsibilities."

He added, however, that as millions of people with private sector pensions are relying on these firms to do a good job, there could be a call for the sector to be more regulated.

Smedley said: "It's important that the public know who these firms are and have confidence in them, and this may come with calls for more regulation."

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