Pension schemes are continuing to take up fiduciary management despite some of the myths that still surround it, says Aon Hewitt.

The firm said that some schemes believe that fiduciary management is failing in terms of the performance and solutions that it provides for schemes.

However, Sion Cole, Aon Hewitt head of client solutions, said: "This is a view regarded as a mystery at best – but it seems rooted in some widespread market myths.

"This situation may be partially due to failings in partnership and understanding between the provider and scheme – often rooted in the original selection process – and is therefore not a failing of fiduciary management itself."

Regarding the view that fiduciary management is only for small schemes, Cole said that there is now a comprehensive range of solutions that are available to schemes of all sizes and are tailored to meet each scheme's unique needs.

And rather than trustees losing control, Cole said that fiduciary management actually gives greater control to trustees as the fiduciary manager should be working within the guidelines set by the trustees.

Concerning the view that fiduciary management is just a fad, Cole said: "We don't believe that is the case. There is ever-increasing complexity in pension scheme investment, particularly as trustees contemplate putting their schemes on flightpaths to buyout or other solutions.

"Trustees need all the help they can get with both finding the right approach and being able to action it in time. Clearly, fiduciary management can help with that situation and it's therefore hard to see how it can be an approach which is just subject to fashion."

First published 01.09.2014

monique_simpson@wilmington.co.uk