Over half of the industry says individual professional trustees should face tighter regulation, exclusive Professional Pensions research reveals.
PP's Pensions Buzz poll last week found 56% of respondents agreed individual professional trustees should be regulated more strictly, against 33% who disagreed.
One respondent said: "A stronger qualification requirement would be a good idea. Running a pension scheme is a complex technical task - the more qualified people there are doing it the better."
Another added: "There is no room for rogues, mavericks or mediocre independent trustees. They should be tested every five years."
Others compared the professional trustee market to the "Wild West" - particularly when it came to sole trustee appointments.
However, other respondents disagreed. One said: "A trustee's knowledge and qualifications does not necessarily mean he or she will give good advice. If they give bad advice, the principal employer should replace them. That's all the regulation you need."
Another said increased regulation would "simply squeeze some very talented and committed individuals out of the industry".
At least one other respondent agreed: "There is enough regulation already. Regulation tends to only affect the behaviours of those who would tend to comply with good standards anyway and will scare off good candidates."
What should tighter regulation entail?
Of the respondents that said individual professional trustees should face additional regulation, there were a range of suggestions as to what this should entail.
Some said that accreditation should be a minimum standard for professional trustees.
Others favoured much stricter rules - with some saying certification or regulatory oversight was needed.
As one respondent said professional trustees needed to be fully qualified, face annual certification, be limited to a certain number of scheme appointments and also affiliated to specific professional bodies.
Another added: "Appointment agreements need to be regulated to ensure employers do not have undue influence on professional trustees."
Professional trustee firms
We also asked whether firms of professional trustees should themselves be more strictly regulated.
Two-thirds of respondents (66%) said they should. Just 29% said they shouldn't and 5% were unsure.
As one commented: "My main concern is that professional trustee firms are increasingly widening their portfolios. The danger is that there could be a conflict of interest in trying to sell additional services. Perhaps there should be similar restrictions to those placed on auditors."
Another suggested that TPR needs to hold a register of professional trustee firms - assessing the financial strength of company and setting minimum indemnity cover based on its client base - adding that each trustee company must set out their control environment and have it audited each year; making it transparent that all responsible individuals are covered in the samples.
A third said: "They should be formally recognised or registered similar to any other regulated business."
Pensions Buzz is conducted each week to anonymously to collate our readers' views on key news and trends. Respondents include actuaries, trustees, investment managers, lawyers, pension scheme administrators, and consultants. A new poll is released every Monday.
To take part, email our research team at [email protected]
