Fiduciary management will rise, says Russell Investments

The use of fiduciary management is expected to rise as a growing number of investors consider using a provider over the next twelve months, according to a survey by Russell Investments.

A poll done by the company found that of the two thirds of institutional investors who do not currently use a fiduciary manager, 39% are considering to use it in the next twelve months.

“When selecting a fiduciary manager, investors view portfolio management and risk management experience as the most important criteria. All trustees and investors believe that portfolio management experience is a key factor when selecting a fiduciary manager, also stating that risk management capability is core,” Russell Investments said.

When looking to choose a fiduciary manager, 97% of the interviewees would like to see strong evidence of strategic advice experience and 97% see investment research as important.

Moreover, 90% of respondents cited capital markets research as important, while 83% would also seek a provider with transition management expertise.

“These results confirm our expectation that more and more investors will turn to fiduciary management over the next twelve months. With trustees under increased time-pressure there is a need for increased delegation, extending beyond the hiring and firing of managers. This is testament to the need for the specialist skills that a fiduciary manager can bring to dynamically manage portfolios and risk,” said Heath Mottram, head of fiduciary management at Russell Investments.

A separate study published in February showed trustees are seeing an increase in the demand on their time, and that they must increasingly turn to delegation in order to keep up with their responsibilities.

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