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How to prepare for reviewing/replacing your investment adviser and how a good Executive can help


Preparation for the review will involve the trustee and executive working together to:

  1. plan the process and decide how to manage the review; 
  2. identify key areas of focus and decision-making criteria; 
  3. capture the trustee requirements and incorporate them into the process

Planning the process

Deciding how to manage the process will be critical to its success. The pensions executive team at Pegasus, have a tried and tested approach to managing such exercises, with steps including:

  • helping the trustee decide which investment advisers should be invited to tender 
  • drafting the request for proposals (RFP), issuing documentation, responding to questions from candidates, managing receipt of submissions and summarising the responses for the trustee board  
  • analysing the responses and making a shortlist recommendation to the trustee board
  • assessing the RFP responses and meetings with candidates to highlight differentiators among the candidates
  • preparing formal score sheets for each stage of the process to facilitate effective decision making  
  • preparing regular reports to the trustee board to evidence and support decision making and ensure an effective audit trail of the project
  • organising all logistics, including presentations, liaising with candidates throughout the process and providing productive feedback to unsuccessful participants

These are material tasks and require specialist knowledge and experience which the Pegasus team has.

Key areas of focus and decision-making criteria

There are many reasons why a review would take place, from dissatisfaction with the current adviser through to a general good governance review. Being clear on what your needs are as a trustee will help you to decide what key questions to focus on and your Executive can ensure these are captured in the process.  

For example, has there been a change of investment strategy, and do you need a different skill-set? 

We suggest questions to be considered here will include: 

  1. What key skills, level of resource and experience is the trustee looking for from an investment adviser? 
  2. Do you wish to retain a traditional investment adviser relationship or move to a fiduciary manager? 
  3. Is the trustee aiming to eventually move to a buyout and therefore is that a key skill-set the adviser should have? 
  4. How important to the trustee is assessing how asset managers consider ESG factors when making investments, and therefore is this a key capability the investment adviser should have? 
  5. How will a new adviser react to your existing portfolio? Does your scheme have the governance resource to implement and manage any new strategies they are likely to recommend? If not, can the adviser provide governance support under a delegated model? 
  6. Will the adviser charge the trustee to undertake due diligence of any existing asset managers it may not be familiar with, and is this acceptable? 
  7. Do you have a concern / preference for your actuary and investment adviser being from the same company? 
  8. Do you want an investment adviser that has asset manager research capability across several countries? 
  9. Do you want an investment adviser to have significant experience with DGFs, LDI and/or CDI?

Answering the questions listed above will help you focus on what outcome you want and will help ensure your Executive are able to deliver the best outcome.

Find out more about Pegasus

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Catherine Palarca

Pensions Executive

London, UK

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Mike Ironside

Pensions Executive

London, UK

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Martina Vatrtova

Associate Pensions Executive

London, UK

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Bill Jangra

Professional Trustee

London, UK

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Profile image for Stephanie Howell

Stephanie Howell

Pensions Executive

London, UK

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