Good practice, key principles and trustee duties

Following the review by the Competition and Markets Authority (CMA) of the fiduciary manager and investment consultancy market, TPR consulted on the production of guidance to support trustees with negotiating the new requirements.

Draft guidance has now been published, which is broken down into four sections:

• Choose an investment governance model

• Tender for fiduciary manager services

• Tender for investment consultancy services

• Set objectives for investment consultant

More information can be found at: tinyurl.com/Draft-guidance

​​​​​​​For those receiving investment advice for their trust-based DC pension arrangement, these guides should be used to support you with setting your investment governance and advisory structure.

We would recommend that you familiarise yourself with the full detailed guidance, however below are a few useful snippets:

• When setting a governance model trustees should understand their duty, and what can be delegated. A tab of responsibilities can document this covering strategy, monitoring and implementation.

• When selecting an adviser, fiduciary manager or investment governance approach, it is as important to understand your own capabilities as it is to understand the provider to ensure these are complimentary.

• The guidance also sets out key principles when tendering for services that can be helpful when it is time to review any adviser.

• Trustees should have their own investment beliefs built up based on their knowledge and understanding.

• It is good practice to document your processes and agreements that assist you in complying with the new requirements.

Trustees should now have set their adviser’s objectives. We would recommend that these are reviewed against the guidance and that any future reviews consider the guidance at outset.

If you would like to discuss your DC investment advisory requirements please contact your Punter Southall Aspire consultant.