Redington, the leading independent investment consultant, is today opening its investment governance business, which helps schemes improve their decision making, to the wider market.
Over the last 12 months both The Pensions Regulator and the PLSA have expressed concerns that investment governance, key to securing good outcomes for members, is in need of improvement for many schemes. Clear feedback between advisers and trustees is the foundation of recognising governance challenges and improving them.
Research undertaken by Redington this year in conjunction with Chris Hogg, CEO of Royal Mail Pensions Trustees and incoming Chair of PLSA DB Council, found that 95% of consultants agreed that “honest conversations” were essential for identifying and rectifying areas of weakness in scheme governance. However, professional trustees experienced this in less than 15% of schemes they worked with.
Focusing on the principles of providing honest dialogue and smart solutions to clients, Redington’s governance service aims to help schemes navigate an increasingly challenging regulatory environment. Headed by Paul Richards, Head of Governance and Decision Research, the service includes governance reviews, strategic advice and solutions to help clients improve investment decision making.
Paul Richards said: “There are many potential structural solutions being considered to drive up governance standards, from scheme consolidation to a renewed focus on the composition of trustee boards. These are some way off, however. Something that is within our power right now is for Chairs of Trustees to ask for feedback and for advisers to give it, even if it might be uncomfortable.
“At Redington, we believe that improving governance is a function of effective feedback and smart, supportive solutions. You need to get challenging issues on the table, but have the ability to provide solutions that are supportive, workable and consider the perspectives of other advisers and stakeholders. We believe that we are well placed to help trustees in this regard and we are delighted to offer our governance service to the wider market.”
Redington advises over 70 pension schemes with assets of over £360bn. Over the last three years the firm has led several strategic governance projects.