(July 10, 2012) — Investor appetite for outsourcing their investment powers to fiduciary managers seems to be growing, despite concerns that they could ultimately regret relinquishing such control.
Almost 40% of pension fund trustees and other institutional investors that do not currently outsource will consider using a fiduciary manager within the next 12 months, according to a recent survey by Russell Investments. Of the over thirty pension funds and other institutional investors that Russell surveyed, 32% said they currently employed a fiduciary manager.
“These results confirm our expectation that more and more investors will turn to fiduciary management over the next twelve months,” said Heath Mottram, Russell’s head of fiduciary management. “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.”
The survey also found that the overwhelming proportion of those surveyed would look to fiduciary mangers with experience in portfolio management, risk management, strategic advice, and strong investment research when and if they decided to outsource.
However, the wisdom of investment outsourcing and fiduciary management is far from established. In February, a survey by aiCIO found that only half of all investors that used a fiduciary manager were very happy with the service and performance they had received. A further 43% of the hundreds of global asset owners that were surveyed were “somewhat satisfied,” indicating that fiduciary managers had to work to do to completely impress their clients. In marked similarity with the Russell survey, 44% of respondents who had not begun outsourcing reported they would within 12 months.
To see the February aiCIO survey, click here.