Challenging advisers more robustly can play real dividends for schemes says Helen Morrissey.
The issue of whether trustee boards challenge their advisers enough has been much discussed in recent months. In last week's Professional Pensions Defined Contribution conference held in Birmingham The Pensions Regulator's Andrew Warwick Thompson also highlighted the issue saying that at times it can be difficult to really distinguish who is running the scheme.
The consultancy community prides itself on delivering top quality guidance and cutting edge investment ideas to clients. However, how often are trustee boards stepping back and assessing whether the ideas being put on the table are really the best thing for their scheme?
Investment approaches come in and out of fashion and it can be easy to get sucked into what is currently popular but as a pensions lawyer said to me recently just because everyone else is going down one particular route doesn't mean that you have to as well.
If the adviser cannot explain what they are doing for your scheme and why then they are failing.
Scheme advisers such as consultants, lawyers and accountants are accountable to their clients in the advice that they give. They need to make sure their clients understand the key points of the advice they give as well as the potential pros and cons.
Trustees should never feel they are asking a daft question if they don't understand something their adviser has told them. If the adviser cannot explain what they are doing for your scheme and why then they are failing.
I hear many stories of trustee boards that have been able to make great improvements to their schemes by adopting a more challenging stance with their advisers. Some are able to make massive cost savings for instance while others feel more empowered and work more closely with their advisers as a result.
Such stories are extremely encouraging. I hope we see a more sustained shift in this direction over the coming months.
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