Retendering your fiduciary mandate: Should I buy an inflatable kayak? Setting off strong without worrying about a puncture.

Why is a comprehensive retender exercise better than a “tick-box” approach? Why is purchasing a real kayak worth investing in instead of buying an inflatable?

• Investing today for the longer term - over summer I had several friends who purchased an inflatable kayak from a local supermarket (you may have bought one too), this was a low cost approach which facilitated an afternoon of paddling and beers on the canal in Leeds. But could they take this kayak to the sea or could it weather a storm? I’m not sure they would have tried. Investing a little more in time and cost up front can offer longevity in the outcome. We really believe that a retender exercise is an important decision for which it is worth undertaking a comprehensive exercise to ensure that you have confidence in your journey with your fiduciary manager.
• Greater confidence in getting from A to B – yes there may be some waves along the way to achieving your investment objectives, but it is important to understand your strengths and weakness in navigation.  Would you set out to paddle without any training on land beforehand? We often see that undertaking a comprehensive exercise can be a really helpful education session for Trustees in order to fully understand their delegated mandate. Trustees can ensure that they are choosing a provider they have most confidence in from outset.
• Help in choosing your kayak – I have just googled “buying a kayak”. I’m already met with an overwhelming amount of information. Do I sit on or sit in? Maybe I’d be better suited to canoe? I hadn’t thought that I might need a life jacket, and paddles, and do I need special shoes? In making these decisions I need somebody with experience and expertise to help. This certainly isn’t us for kayaks but for help with fiduciary management selection and advice it certainly is. I am very proud of the work that we do with clients and the time that we invest to ensure we thoroughly understand this market.

Please look out for our paper being released very soon by my colleague Alex Owen – a guide to retendering your fiduciary mandate.

Following the CMA review, pension schemes using fiduciary management without undertaking a competitive tender exercise initially will need to review this appointment. We believe we are well placed to help schemes re-tender their FM mandates and meet the requirements set by the CMA Order. This article shares my thoughts only. Please get in touch with the KPMG fiduciary management research team if you would like to talk about what the CMA Order means for you.