LCP Sole Mates – Understanding the Evolution of the Professional Trustee Landscape

• Scrutiny of the Professional Trustee market is rising. With this report highlighting that the majority of new PCST appointments were secured by three firms, consolidation of assets, and therefore influence, continues. It is not surprising that TPR is extending formal oversight to trustee firms. At Pi, we are looking to respond to the recent consultation to share our thoughts on how to ensure transparency and accountability are embedded within a robust governance framework across all trustee firms, to ensure they deliver value to the sponsor and members.

The report confirms what we see in practice, the pace of new trustee appointments has slowed but the growth in PCST appointments continues to increase, often manging larger mandates. There has also been a structural shift in pensions governance, with over half of UK schemes now appointing professional trustees.

However, there is still a 47% universe of schemes without a professional trustee, often at the smaller end of the market. We have seen that smaller schemes can still have complex requirements and are often where a professional trustee can add the greatest value – whether that is in streamlining decisions, bringing pragmatic expertise to sponsor negotiations or driving forward cost efficiencies.

This is an increasingly competitive market, so our belief is that continuing to deliver bespoke solutions, ensuring professional trustees have enough time and support to work closely with sponsors and delivering both trust and agility in governance frameworks will be our continued focus of development here at Pi Partnership.