Fiduciary Management | Institutional Masterclass
- 44 mins 46 secs
Fiduciary management is gathering steam in the UK, in fact 14% of pension schemes now use fiduciary management and that number is growing. But what are the pros and cons, how do you judge performance and how is it evolving? Discussing on this panel are:
- Hannah Simons, Head of Fiduciary Management, Schroders
- Charlotte Tyrwhitt Drake, Institutional Relations Director, Kempen
- Roger Brown, Founder & Director, IC Select
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Hello and welcome you watching Asset TV's Institutional Masterclass and Meet Jenny Ellis today, looking up for douche management or produce, she murders. It's certainly gathering steam in the U. K. In fact, fourteen percent of pension schemes now used for do street management, and that number is growing. But what's the pros and cons? How do you judge performance and how is it evolving? They're three of the topics we're going to be covering over the course ofthe this program, and I have a panel of three experts with me today to discuss. Let me introduce them to you. We have Hannah Symons, head of Fiduciary Management. Schroeder's Charlotte Teret Drake, institutional relations director. Campen and Roger Brown, founder and director of Icy Select. Say, Roger, I wantto start with you first and the market for fiduciary management in the U. K. What we look at what it's like today. Well, the latest statistics we've seen is that there's around about five hundred schemes now. Have full fiduciary management would call it on. That represents just over eighty billion pounds and assets and the management. The first thing I say those statistics are obviously wrong because there's a whole amount of things which don't get counted in the market, which our fiduciary management, some of the largest producers managers in the UK people like Rail Pen BT pension scheme. Many of the big schemes have in house produce three managers, and you don't get the statistics they don't market to the universe, so nobody's aware of them. Our guest, um, it is it is eighty four eighty five billion under management with the producer management companies that are selling services. There's probably at least double that in total. Under management. When you include the biggest schemes, the partial producer in management market is somewhat smaller again. It's very hard to count. Calculate, we think, is around about two hundred schemes in that. But the challenge you get there is that a lot of the stuff that the asset managers do is really partial. Fiduciary management is just asset management, so they could also be doubling up on DH. There could be hundreds more counted into that space, and then finally what we term implemented consulting where decisions are still retained by the trustees, but that they give power to just implement them on their behalf. We think there's about another two hundred schemes with that type of framework and some twenty five billion of assets. Okay, so then how do you fit into all of this? Because I know Schroeder's is very well known, its asset management side. So how how did the fiduciary side with? So you've already highlighted that showed us is well known as an asset manager, and that's our core business. And today we look after about four hundred forty billion of assets on behalf of clients globally. The fiduciary business today is quite a small part of that. It's one point five billion, but it's actually a really important piece. Off are also the future prospects. We think that a growing number and we've heard from both you and obviously Roger with his and different definitions already on the desire by trustees to delegate some of the decision making to investment experts to support them on, we think that need will grow over time on therefore Schroeder's. We think it's a very, very important part of our business. And Charlotte had us camp fit into this S O campaigns Air specialist, fiduciary manager. This is what we've been doing for years and years, and we started in the Netherlands, where obviously this model was the first adopted and groan. And obviously you see, that's very prevalent in the market there now, Andi, I think in terms of context, it's useful to understand that ten years ago in the UK market for douche management was twelve billion. So when we're talking about one hundred thirty five billion now, that is a significant increase, even if the numbers are slightly smaller than we would actually think they are in this market. So from our perspective, we're specialist in this area on the fact that we're seeing increased business. The fact that we're seeing more trustees looking at this just shows how powerful it is in terms of I think, trustees governance model and their ability to control assets. I mean, that's certainly the case. I mean, what we would just stay in terms of the market growth rate is it's been growing by thirty to forty percent every year for the last ten years. So it's been a very study change over towards fiduciary management. No, how would you say fiduciary services have change in response to a A shifting market contacts and developing client expectations? What of you see and say, over the last ten years, well, we've heard about that incredible growth that we've seen year on year. Andi, what we've seen in the UK market is continued new entrance into that. So when Fiduciary first started here ten years ago, it wass dominated by the investment consultants that had moved into the tradition management space specialists like Hampton on have entered along with the asset managers like ourselves on. We continue to see those new entrance to the market. What's been interesting of late, I think, is that that's been focused by more and more asset managers entering the market Internet. So that's about new entrance and how people actually access fiduciary management. I think what we're seeing now is a need for producing management. Teo Service clients at different stages in their flight paths. Say, For us, we have clients that are very, very well funded. We have a couple of those on DH. They have different needs to recline. That's much earlier in their journey, where that perhaps the desire the need for gross is very, very strong because they have quite a considerable funding gap. Producer managers have had to adapt if you like, and they're offering to support each each client at that different stage in that journey. Charlotte you see, in this evolution process, I think it it's useful. Teo, Look at the Dutch modern. I think a lot of people look at that think, well, we can implement that in the UK and I think it's very important to recognize that it's very hatra genius here. You know, we have something around seven thousand schemes. They have about three hundred. It's a very different marketplace, and that means that also what you're seeing is food issue managers operating a different levels in terms of the size of assets that they can work with. Which means that not all physician manager's a catering to every single scheme in the marketplace. And so I think now more than ever, you need really need to get under skin and understand exactly what it is that each asset manager for tissue manager is actually offering to their potential client base. So that's that's a changes where on the marketplace, Well, Roger, there are a lot of different offerings now. I mean, what does this encompass when it comes to producing management's and also you've got part and full fiduciary mean how to navigate all of this? Yeah, start with the partial fiduciary management because we really don't. It was a a marketing invention for us by the investment consulting firms to be able to sell asset management services. It's really no different to them saying you need tohave an equity growth fund on DH, putting that out to some kind of fund manager to run. They said we'll do it in house and we'll select the managers. So the benchmarks are exactly the same. Their equity benchmarks of bond benchmarks, depending on what it is on the nature of that. To us, his asset management, the partial tradition management label, is just something which is picked up if it happens to be done by an investment consultant rather a fund manager in terms ofthe the full fiduciary management and where that sits, I mean that that is actually a very clearly defined, currently a clearly defined position on. But to us it it's always been where there's been investment management agreement to delegate assets. Now that looks to be in a state of flux now because thie cm ageist last speaker thing it wass published a potential new definition, which they're going to use, which will include implemented consulting within that definition. Now implemented consulting is where you don't have an investment management agreement. There's not full delegation. The trustees set a number of parameters that they expect the investment consultant to follow. But the investment consultant would automatically run D risking without necessarily referring back or simply just saying, We will de risk this tomorrow and you've got twenty four hours to notify us. If you don't want to do it, it's almost by veto that the discretion is done. They will change asset managers on that basis. As I say, the latest version off the CMAs definition to our reading will include implemented consulting and say it is no different tradition management. It is, actually, it's an interesting area. Is, if you look at the big investment consultant is that offer produce you management. They will include implemented consulting with an official team. But there are some advisory consultants that up to now, I haven't been defined its fiduciary managers on DH. For them, it's still seen as an advisory type of contract, so that, I think will be a quite narrow of change as we go through the rest of this year. Do you think there are lots of these different definitions could create almost confusion. It's like a barrier for people when it comes to traditionally management. Yeah, it certainly doesn't help. Everyone calls the same thing by a different name and some caller outsource CEO and chief investment officer Producer management delegated consulting. In essence, they all are around delegation of decision making to another organization. So then what would you say Hanna could be delegated to a fiduciary management? What does that cover? Well, I think that is actually and quite clear that the trustees must continue to own the strategic decisions regardless of the governance model that they adopt so these decisions around the funding level objective that they want to set the time frame over which they want to achieve that objective on the D risking plan that they want to put in place. Trustees will always own those decisions. That's very clear on under the Pensions Act and in most of the models and again, this idea of there are a number of terms that are used slightly differently. But really, they relate to delegating the day today implementation decisions. So that's thing like things like tactical ass allocation on individual manager choices. How you actually going to implement an investment will be good to do that on an active or passive basis. So all of those day to day decisions, what I like to think also as being the second order decisions, the most important decisions. All those key strategic elements. Actually, by delegating those day today, second order decisions, the trustees can actually free up time to really focus on those very, very important decisions. But one concern that crops up a lot as this conflicts of interest concern, and for you being Schroeder's being an asset manager that also does fiduciary and use a lot of in house funds mean, How do you manage that? Is there a conflict of interest there? Well, I think whenever anyone in any walk of life chooses to delegate a decision to another party, there's always the potential for conflicts of interest to arise. What's really, really important. And this is really important to Schroeder's. It's how transparent you are around the potential conflicts on, then the ways in which you seek to mitigate those. So, yes, it Schroeder's. We absolutely do use internally manage solutions. But we're really, really clear about that. With our clients. We make sure that at the very beginning of the conversation they understand that elements will be managed in house by shredders. We'd add that for many of those elements, they're more systematic or passive in their nature. So that's another important element that we think we want you our kinds to really clearly understand and Charlotte fear. What's your thoughts on the conflict of interest? Is this something that even crops up for you? And also, you know, what do you think will shape this sector Moving forward? Yeah, I mean, actually, as with them, Schroeder's we have unleashed, set off funds that we do offer two clients, but not to any of our current UK for Lucien management clients they operate in. As I said, niche markets. But potential clients could access that if that's what they wanted. So we have to be very clear what's on the table. What are different lines of business are what we offer. And I think the other key thing is you need to be showing alignment. So you know a lot of things concerns around producing management, our loss of control capacity, that sort of thing. And so I think transparency is keep alignment in terms ofthe How you going to reach our funding objective, you know, and and charting that along the way, you know, how is your advice actually helping us get to that end goal? All of these things are really important, and I suppose you've got to keep bringing that back to you. If you have conflicts of interest, you to be very, very up front about that. But you also have to be showing alignment in terms ofthe How are we looking, too? Compensate ourselves in a way that matches. What we're trying to do for you is a scheme to summarize this section. If you like what you think will shape this industry moving forwards, it's a question I think, you know, I think obviously there are some key things going on at the moment. They're affecting all trustees, all service providers. And a lot of this is about governance. I think I think everything that we're talking about in terms of conflicts of interest, in terms of transparency in terms of the market works and also things like SG eyes all about governance right from the top, from the trustee board all the way through down to the service providers. So you have to have good governance. And so the key, actually is. What does that really mean and really, really getting into that? Just one thing that will, I think, really drive. That change is not so much gonna come from the production managers, but the governance models of pension schemes. Trustees themselves are under ever greater pressure. Teo, you know, much more regulation to deal with. Investment is getting more complex on this. Fewer trustees who will actually even sit on a board given all that. So you've got it's really the government's side. On their resource that will create, I think the demand and changed the way in which produce three managers, um, react to them. Really? Roger. I'm going to go to you first again. And why do you think pension scheme should look at producing management? What They're pros and cons for them? The, I suppose, just as I was just alluding to the the real advantages of fiduciary management is about dealing with investment complexity when you have a limited resource among a trustee board. Andi, it's been a big change in the last fifteen or twenty years. Is far more derivatives being used. That challenges lay trustees to a very high extent. So I think that will continue to really push forward the fiduciary management aspect within fiduciary managers. They say that, you know, they can add a lot of value by market timing. We haven't seen any evidence of that. I have to say, And certainly all the academic evidence of fund management suggests that that is pretty illusory. So we're not massively excited that trustees will pick that up, even though it's one of the great benefits Produce reminded you speak about, I would say that. I think that's still the big driver that sits in. There is the strategy, and I think that with a fiduciary manager, they are capable off producing a more complex strategy. They will get better diversification, and consequently they will gain a better investment efficiency. And I think that is fundamentally the biggest game that trustees will get from it. So what do you think of the benefits Charlotte And also do you want to comment about that market it market timing suggestion? I think actually, we're quite open, and I think we agree that actually, the thing that really, really drives actually reaching the end goal is strategy. But I think it's very key People work in different ways as a solution Management house, we do get involved in the strategy and providing advice around that we worked very closely with the actuary and other service providers to get the right goal. And that is the thing that sets the scheme up really to be able to deliver on its on its funding target. So, you know, I agree, and I don't agree in different ways. I think by having the operational expertise and also the investment expertise in house, you can do some market timing. But I still think this is a long term game. Andi, everything we're reading about recently, everything from the eyes pointing in the direction that trustees should be looking at long term goals, not short term. I think one of the greatest things I think is Roger mentioned is efficiency. Actually, I think a lot of trusty boards now have a huge amount of paperwork to go through their agendas of full every time they have a meeting that probably only having four forty six meetings a year, it's incredibly difficult to get through everything they have in their workload on DH to be able to review managers on do beauty parade. So therefore it makes sense to be able to outsource some of that where they need to and they don't necessary have expertise in time. So I think efficiencies is one of the key things I'm having your thought. Adecco a lot of what Charlotte said that when we talked to our clients and we talk about our role as really being there, Outsource CEO. So that's actually one of the favorite terms that we like to use when we're explaining the benefits of produce three management that really our clients are having their own CIA. It's just that we sit in a different building on the market timing piece. I think the other element of that is there are always new investment opportunities arising. Andi. It's really important that trustee is a Rabel Teo actually benefit when when something new comes along and again that the governance structures certain trusty boards don't allow that. I think producing management can really be very supportive of that. I'm I agree around setting the right long term stress she having a de risking framework is the most important decision that trustees can make. But through time, there will be opportunities to move the asset allocation around. As a market changed your new options come along. So in terms the misconceptions of fiduciary management, what would you say? Are they when it comes to the perceived on the real ones? And also, I think one we're hearing a lot about is that produce she management only really works for a small pension schemes. Is this the case? Well, actually, the three most common misconceptions that we hear our cost control and complexity, and we've heard a lot about that complexity already. I think I'd probably disagree with you on the and only being right for big pension schemes and when I look at the KPMG data, and that's actually what's most visible to us on. If we look at the sort of shape of who's doing produce you management, it is schemes of all sizes on. Yes, their data shows a larger proportion off. Smaller pension schemes have have adopted fiduciary, but actually that mirrors the makeup of the U. K market. There are many thousand schemes here on. They are generally quite small in size, and you want it away. And in terms of cost, Well, yeah, what we see in terms of cost. People think producing management's more expensive, and that seems to be the market's perception of it. We would actually argue it's probably cost neutral for some schemes. It is going to cost more, but we see the highest cost levels are off. Any sort of total governance solution come from the advisory side. Some of the structures they use are very expensive. And if they moved to produce, new management was a cost. Saving one of our clients. And SORA cost saving of about thirty percent, moving from advisory to fiduciary another one. It was an increase, so it depends on the type of structure they're starting from, but producer in management is not necessarily more expensive for pension schemes. I think it's also useful point out the c. M. A. Actually looked at this as part of their interim review, and they said that trustees that were less engaged in a open, tender process actually saw increased costs. So it isn't necessarily the case that the pollution management market is more expensive. I think sometimes it's the process that's been gone through. So what, then do you think makes for do sri work? And what role does the trusty play? I think I think you do shoot management works well when there's a clear understanding what the roles and responsibilities are between the trustee and the fiduciary manager. And I think you have to be very clear from the outset exactly what that is. And I think there has been confusion. I, you know, control in terms ofthe because obviously that was one of things that you mentioned. You can't cede control. Ultimately, it is your responsibility as a trustee to know exactly what is happening with your fiduciary manager, which is why oversight is incredibly important and that has to be built in, you know, and I think also more people are looking to independent oversight, you know, in order to get a real perspective and judgment on how their tradition manager is working if I may, I just wanted to sort of jump in on the comments he highlighted about you at the outset. So important to be really clear on roles and responsibilities on and one of the things that we do with our clients has worked through what we call the government's framework and identifies alert decisions that a really needed for success and then highlights on who actually has responsibility for making the decision, who's providing support or advice to the trustees around that decision on then who's providing oversight on again? It really helps focus the mind at the beginning, but it's also the opportunity through time to review how our decisions going on, who made those decisions and how accountable are they to those that is absolutely, incredibly important. We we see a number of schemes who come to us. Having appointed of fiduciary manager two or three years down the line way need to think about some oversight. We think that oversight is the first thing you should do before you even start to look for a fiduciary manager. That whole framework of governance has to be built before you delegate decisions to someone else you can't delegate and then think, Well, how are we going to look after George? I'd argue that there's a decision before that, actually, which is what is the right governance model For us, Fiduciary is just one of the options on. In my view, trustees needs support check. Actually. Help them understand why fiduciary is right for then on what so so they need to make a comparison about what are the other models and therefore fiduciary. Then once you've chosen fiduciary, then you go through a process around Who's the best produce you manager for all needs. So Roger. In April, Thie Icy Select it launched the sushi management performance standard, which help pension schemes compare the skills of duty manager's hired by trustees. So what came out of this? I think the thing we'd emphasize with performance is the way it gets used of singing This manager is better than that. One is not the right approach to performance performance is just the start of a conversation If you have information on a standardized basis, then you can start to ask the question. Why is it like that? Historic performances, influenced by market who performed strong in the last five years is not necessarily going to do well in the next five years. Engages trustees in looking and thinking about what might drive this producer managers performance versus a different one then, I think, is probably the big change. But before that, I mean it was just the wild West in the market when it came to performance. Fiduciary managers wear putting out all kinds of nonsense on DH, You know, that was just apples and oranges. Reminded just went quite a new entrance way. It was challenging, and it was an oversight in search firm. We'd get these track records, and you just they were really influential in trustees. I think that's the They look straight at performance. It's the first thing they look at and then you saying, But they're not comparable. And so it was a big effort to wind everything back and try and get it onto a standardized basis. Now we have the standard for the whole industry. That information is free to access for any pension scheme. If they're doing a search, they just request the data in line with Standard it will once we've set it up and launched it later this year. Next year, next June will be passing the intellectual property of over to the institute who run the global investment performance standards, and they will then take the concept globally. It's a shell, and what do you make of this? And if you signed up for this, yes, we have. Do you think it's really important? I recognise some of what Raj is saying? Possibly more from the consulting side. Andi, I think it comes back to the definition again, which is if you're going to have a loose definition when it comes to performance, but a very strict definition. When it comes to service, we're gonna end up with all sorts of things being bucket into your performance when you when you demonstrate that. Which means you're not really getting a clear view on how that performance actually tallies with what the service you're looking at specifically for your scheme, and I think that's the issue. So from our perspective, we've been we've been engaged right from the outset, and we're very much, you know, signed up to the standard way think it makes complete sense to have compass. It's to allow schemes to be able to see how their scheme would potentially be managing what that performance would look like. And honey, your thoughts. I'm absolutely identical to Charlotte Say we've been engaging with Roger and Icy Select on the performance standard and since we launched our fiduciary service, because we do agree that it's really important that trustees can make well informed decisions when they're appointing a fiduciary manager. And so allowing a like for like comparison is a really keep to that. So then, Hanna, what would you say? Skill set wise is most important for a fiduciary manager. So when we talk to our clients on, we took about sort of three key ingredients for success. The first one being having a very clear objective on a plan of action to meet that objective and the second Teo, are managing the liability risks from many of our client's liability risk represents the largest face on the final piece of that is how you got close the funding, actually, new growth assets. Those second two elements are really investment management and solutions on DH. Therefore, we think, as an investment manager on, we are extremely well paste to deliver the returns and the risk management that our clients need to get them to full fundings. And we think that's one of the key elements on to that long term success. And Roger went judging a fiduciary manager in what sort of time frame should you look at? I mean, how over what period? How long's a piece of string, I suppose, is the answer. I guess you'd say with any investment performance, you probably talk about whole economic cycle, which is probably typically about seven, eight years. We look at performance for clients on a one year basis on that highlights issues that clients I have not been aware ofthe, perhaps things going wrong in sub funds. So there's a requirement to look at things and shorter, too. Certainly, take a decision about whether the fiduciary manages right or is delivering anything less than five years is. I think I'm probably pushing it. Hannah, I want to go to you first. So how could it give funds? And imagine, in this environment, we find ourselves in today? Well, I think actually, if I may, I'll start in a slightly different place because I think there are benefits to produce your management in all markets. But one of the things that for us people talk about when they moved to fiduciary management is that potential to benefit from speed of implementation. So by having somebody that's closer to markets and able to react and respond and so now two related teo, the actual question around the uncertainty that we're seeing at the moment we see that produce you could be a really he benefit because you have somebody there on your behalf looking at markets every day has been clear. Most fiduciary managers are not day traders, but the potential to react respond if Ma market opportunities arise or if risk events occur is really beneficial to climbs. And Charlotte, what's your thoughts on this? Because it is difficult period at the moment, probably a prolonged, difficult, difficult period with everything that's happening mean, how how do you think producing managers can cope with this. I think it's just generally difficult, Phil. Anyone in the investment markets because trying to look at standard economic theory and where we are at the moment, you know, they seem miles apart. There are a lot of different things, political and economic, that are driving the markets. Andi, I think no one's quite sure exactly the timing, which comes back to the point I made earlier about market timing. I think strategy is incredibly important, and sometimes having a focus on a particular issue political issue economic issue at a trustee meeting can be dangerous. It can lead to you making you know a stab in the dark type decisions, whereas a fiduciary manager is is working on a day to day basis, thinking about the long term strategy and also about the other risks. So you know there's the risk to the scheme. But there's also the risk. The sponsor, you know. And I think a solution manager because of the nature of their roller looking at all of the parties to the scheme, not just the trustees themselves, and that is an incredibly important role that sometimes get lost. When you've got lots of different asset managers. You're trying to review lots of different third parties, s O I think having an integrated model and being able to step back from the markets is important as well as obviously. Looking at new opportunities would just like to add, but I think if if the markets are going to be more turbulent and who knows, really? But if that is going to be the outcome for the next few years, you think that's where fiduciary management you'd expect it to add most value it is. And that comes back to diversification. If you're an advisory model, you probably have no more than seven or eight positions in their phone. Producer Lee manager Khun Double, or even travel out on that. Diversification is what you really need in difficult times over the last, I suppose, since the financial crisis the last ten years, it doesn't matter. Really. What model you follow. Equities have gone up. And as long as you had a lot of them, you have done well in difficult markets. Diversification adds value, and that's what producer management can bring. Yeah, so then, Charlotte, how do you assess risk? I mean, what does risk means? Well, risk is obviously coming from all sorts of different directions. I just mentioned. There's the risk of the sponsor not being able to pay contributions. That's a huge risk for the scheme. If we're thinking about it from an investment perspective, there are long term and short term risks risks to the funding level, interest rates, inflation risks. And what we're looking at is we're using. I suppose this is one of the key things also about management we haven't brought up is, um, risk management models that we're using to be able to look at strategy over the long term and make those decisions between risk and return. And so we're looking at scenario analysis. Was stress testing our strategy on a continuous basis to make sure that levels of far overall risk not too high s O. You know, that's an incredibly important role that official manager can perform. Obviously, other models can do that. But I think the fact that you're integrated in it miss the thing that makes a difference and honey, your approach to risk. So I think that sort of buzz word at the moment, particularly the regulator, is integrated risk management, which had its big, its highest level is looking at funding on Covenant on Investment risks. Together when we get into that focus on the investment wrist side, the key thing is to be able to quantify a holistic risk that's coming from all of the elements of your investment programs. And like Charlotte, we use a value at risk of our measure Asian and to help our clients understand on the total risk, but also importantly, the contribution to risk from the different elements of their investment strategy. So how much risk is coming from changes to interest rates and inflation? We can quantify that really helped clients understand in different scenarios what might happen to your pension scheme on LA assets liabilities and therefore the impact on the funding level. But Roger does this take us back to what we were talking about a little bit earlier on about judging performance, that such things? There's a lot of different assumptions when it comes to risk, though. How do you judge one manager compared to the next, when they're not sort of coming from the same point of view? To begin with, the problem of assumptions is one that's largely ignored I think across trusty boards and the impact of it on decision making way actually run a test. Whenever we do a selection exercise of getting every fiduciary manager on the short list to model the current portfolio we find on the last one we did. The return expectation of that portfolio varied from point nine percent up to two point three. That is purely a difference in assumptions now that when you take it through to the to every thing, actually that first of all to the portfolio solution for some of those they were having to increase the risk in the portfolio to achieve in the client's case of one point eight percent return, others are having to reduce it. It's only down to their assumptions. At the end of the day, I think that the managers with the most optimistic assumptions will have the less lower probability of delivering long term. But they will also have the lower risk in the solution. That's just a function of it. The other thing which higher returns give you is a lower total cost because you don't have to put his much in growth assets, as other managers do, which is more expensive. So we think if you're selecting manager, you really have to dig into what the assumptions are behind the entire proposition they put forward on also to adjust the fees that they're quoting for those assumptions as well. It's not easy, but it's really worth doing what's interesting and we've talked about uncertainty and turbulence on I can be pretty confident. But on the assumptions that we use in our analysis won't be right and I could be back. I think I can say with confidence that that that we were not going to get those assumptions right. And what is really important, though, is comparability. So one of the things that we do is we start my modeling, a client's current allocation on our assumptions on DH. Then every strategy that we present is relative to that. So then we can show things that are on a consistent basis. So if the current's trashy hasn't expect to risk return, we can say, Can we find on alternative strategy that has the same level of return for many of our clients? Clearly there's a return who hold on. They need to meet a same return, but with lower risk or other opportunities for some clients to actually increase return for the same level of risk. So I can't have absolute confidence that they will be the actual outcome. But I can be very confident on between when I'm comparing strategies. Is one going to be more risky than the other? And they do think that's helpful. But then if you start comparing my work with with Charlotte's work is that that's actually really hard to do, and that's where you need Roger to help with that. And I would say as well you know what we're doing here exactly what everyone does. We focus on investment risk, which is at the heart of it. When you delegate to fiduciary manager, there's a lot of other risks that aren't just investment things like data security. Suddenly you've given that away counterparty risk. As a trustee board, you have to have a structure in place to know of any of those. Risk is increasing at the fishery manager. If you don't. If you can identify those things and they suddenly go wrong, you'll be very exposed. A group of trustees and you know it's one of the other point I was going to make, which is actually reputational risk. So we woke the number of schemes of charities on DH there not alone. You know, there are other corporate pension schemes as well, who obviously facing exactly this issue, but that Khun completely throw you off course so you can have all the assumptions in the world. But something happened to the corporate level in terms of reputational damage and that that affects the sponsor that then affect their ability to contribute to the scheme. And it has a number of knock on effect. So I think it it does go beyond investment I agree with, and when it comes to transparency, what's information, she needs to get back in it. And when it comes to transparency across the value chain, well, we talked about performance, and I do think that's a big element. But I think that you also have to be assessed on your advice, and this is the problem with having a snapshot in time of performance. You have to be able to say, based on the assumptions you used in the advice that you gave does just the performance does what we've experienced. Tally with that. And so do we feel confident with the decisions that you're making S O. I think you have to be very clear on your reporting and very transparent on that. Where the fees are where, where performances coming from, where the drivers are, where you've made key decisions and what value that's added Andi. Also, I think you need to be proactive in coming with ideas, but also with potential risks or potential problems to the scheme. I don't think you should, you know, you get the appointment, you sit back, and that's it is about pro active engagement. I think I'd add, if I may on its I wholeheartedly agree that you're finding ways to measure that quality advice, but also, I think it's the timeliness of that advice. Was everything ready ahead of the meeting so that the trustees could actually review it in time to have a proper discussion and debate in the meeting? On what type of training have you offered on the client as well? That's an important part about making sure that trustees have sufficient invest and expertise and knowledge to be able to understand all of this information that you're sharing with them. And just to go backto one of Roger's comments around on some of the other risks that may come along around something like counterparty risk. It's also really important that your fiduciary manager is sharing details around things like corporate change or how they're managing other elements of the investment strategy on your behalf. Thes holistic over some weight off. The mandate is really important as well. A CZ those quantified data that you can get from your performance metrics as trustees, I think you don't just have to take what the fiduciary managers give you and say, Is this right? You should do the other way around. You should think of trustees. What information do we want and tell the fiduciary manager to give it to you instead of just settling in going? Well, what What are we getting here? You must be proactive to get that right control. Our reports are continually changing because actually, one client asks a question, and I would love to know more about this or can you incorporate this into your report? And you realise, actually that's relevant for every single one of our clients? So it's a little bit frustrating because the each quarter. It seems that there's a new update, but we think it's because we're actually giving better reporting. I'm alive. It's so finally, then to summarize, What would you say? The key issues you think judicially management faces over, say, the next twelve months. So I think we've been highlighting thie investment angle, and I think there's a lot of political uncertainty. We're seeing continued rate rises in the US All of these elements are conspiring to make it an even Mohr difficult environment for investments and going forward. Would you agree? Yes, I think they probably it's felt a bit too comfortable, maybe French awhile, and people have necessarily understood why on DH, there are different risks around the corner. I don't think anyone predict exactly the timing on that. But I think the other thing that is happening as we we've been alluding to, you know, the pensions regulator, the the government putting more and more pressures on trustees and therefore fiduciary managers actually having to do Mohr to communicate and be transparent with trustees in order to help them in their role. I think that that will be key over the next twelve months and longer, Well, unfortunately, are almost out of time. So I'm going to ask, you know, if your final thoughts what you'd like our viewer to take away from this master class there. Roger, why don't you give first? I suppose it for any trustee board they have to think about their governments is, Hannah said earlier on. That's the first step to really, how would you look at that? Is essential, but being clear about why you want to do something, whether it's producing management, whether it's advisory, really bottom that out, and then make sure you have all the right controls in place before you start, I would say the key things that clarity, transparency, an empowerment. So I think trustees are in a brilliant position. They they should feel empowered because they can ask us anything at any time, and we need to be transparent. I think what would help is for them to be very clear about what they need from an expertise, skills, time, perspective and that they can then be clear with fiduciary managers, whoever they're using in terms of what they really need from them. And that will ensure the best alignment on Hannah for me, it's the transparency element. So by being really, really clear, upfront about on your long term objectives and what you're looking for from your fiduciary manager than the fiduciary manager being out to actually build and design a solution that's designed to meet those very clear objectives and then the reporting back on how you're doing against those Well, Hannah Charlotte, Roger. Greats. Have you others today? Thank you. From although it's Harriet Asset TV. Thanks for watching and see you next time.