Working with a Sole Trustee - insights for advisers

24th June, 2022

  • Three of my new trustee appointments this year have been as part of a move to sole trustee. The switch from trustee board to sole trustee is an increasing trend and an opportunity to introduce fresh thinking and new ways of working. For advisers, the appointment can result in new approaches to cost control, challenge and pace of decision making. So, as a sole trustee, how do we manage the relationship with scheme advisers? Here’s an inside track based on my recent experience.

    Knowledge management

    The incumbent advisers are a great source of knowledge and it’s important that we don’t lose their valuable experience gained over years of service. An adviser’s corporate memory bank is incredibly useful in understanding the rationale for decisions taken by the previous board and to supplement what is written in the minutes. Meeting the adviser’s key team members, receiving a forward looking actions list and notification of any important decisions taken or issues arising, helps to ensure an efficient transition.

    Cost control

    One of our initial “take on” tasks is usually to review the scheme costs and contracts, to ensure the services received provide value for money and fit with the way we work. This may result in a small adjustment in the services we need from our advisers as we are all pension professionals. However, it doesn’t mean that we are going to re-tender services. As trustees, we work with most adviser firms in the market. We know what good quality advice looks like and what it should cost. It is helpful to us for advisers to approach conversations around budgets, especially around project work such as GMP equalisation, with a sensible offering so we can avoid protracted conversations (and time and cost) about what fair value looks like.

    Professional challenge

    Our professional trustees have strength and depth in pensions specialisms. We will seek advice from the scheme’s advisers to support our decision making, but we don’t need the basics explained to us, or generic technical information. High quality advice does not need to weigh heavy. We want key information, succinctly described with clear recommendations, which will help us to make decisions.

    We can draw on our team’s collective experience to challenge the scope of the advice, and what the advice says. Depending on the subject matter and advice given, we may also request that other issues and technical matters are explored. In risk management terms, our model means that we have thorough checks and balances in place for robust decision making.

    Pace of decision making

    One of the main advantages of the sole trustee is our ability to be agile and to make decisions quickly. We might expect to meet within a couple of weeks to discuss follow up actions after a trustee meeting, and we can convene a virtual trustee meeting within hours if needed to respond to a developing situation e.g. to respond swiftly to changing investment market conditions. For advisers, this means that we need advice delivered within shorter time frames than a trustee board, which meets quarterly, might require. We have found this requirement is best met by adviser teams with strength and depth in numbers, who can deliver regular engagement despite having competing deadlines or staff absences.

    Quality management

    Feedback is a valuable tool in achieving and maintaining high standards of service. We identify and address issues as they arise and agree an improvement plan.

    Team game

    Being a sole trustee is a team game and one we believe works best when it is led by the trustees, working collaboratively with sponsors, and getting the best from our advisers. We look forward to the trend to sole trustee continuing.

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    • Published bySarah Brough

      Sarah Brough is an Accredited Professional Trustee, based in our London office. Sarah joined us in January 2021 from the Government Actuary’s Department where she was Deputy Chief Actuary of Funded Schemes for 10 years. She has more than 25 years’...

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