Most fiduciary managers hit their targets in 2024, but longer-term results were weaker, especially for those aiming for higher returns, according to Barnett Waddingham.
According to Barnett Waddingham’s latest Fiduciary Management Investment Performance Review, based on analysis of over £60bn in pension scheme assets, highlights that many managers are still recovering from recent market shocks.
The report finds that many fiduciary managers have struggled to meet long-term objectives despite strong equity markets, with significant variation in performance highlighting the importance of manager selection.
Nearly half of mandates now target returns of liabilities +0.5 per cent to +1.5 per cent, yet results vary widely depending on investment strategy. Performance dispersion remains high, with over a 10 per cent gap between the best- and worst-performing clients of the same manager.
Regulation and policy are now seen as the biggest challenges facing fiduciary managers in 2025, overtaking previous concerns such as hedging and inflation.
The review, which is now in its fifth edition, offers trustees and sponsors independent insight into how fiduciary managers have performed in both the strong 2024 market and over the long term.
Barnett Waddingham partner and head of outsourced investment services Peter Daniels says: “The findings of this year’s review provide an interesting backdrop for the many pension schemes that will be formally reviewing their FM arrangements over the coming year.
“We are approaching the five-year anniversary of tender activity instigated by the CMA review; as a result, trustee boards should be reflecting on whether their provider has delivered on its promises and whether their FM arrangements remain fit for purpose.”
