Schemes rushing to meet the June deadline for CMA compliance on the retender of Fiduciary Managers could cut corners leading to poorly negotiated fees and inappropriate mandates, warns Hymans Robertson.

Trustees making retender decisions solely based on time pressures could risk undertaking the process without a full commitment leading to poor outcomes for schemes. This means the assessment of the mandate and strongly negotiated fees may not be done thoroughly, claims the leading pensions and financial services firm.

Commenting on concerns for schemes as the deadline looms, Samora Stephenson, Senior Investment Consultant, argues that full consideration must be given:

“The purpose of the CMA’s deadline is for schemes to ensure that fiduciary management provides value for money for pension schemes, while at the same time demonstrating good governance. We are concerned, however, that schemes could be heading into the process without advice as they rush to ensure compliance.

“A rushed process risks missing out on the best fees and not properly testing whether requirements have changed since mandates were set up. Schemes must ensure they don’t put speed first to make sure this isn’t a wasted opportunity to have the best fees and the most appropriate mandates.

“We believe that savings of up to 30%, a significant saving, can be made with a thorough and professional negotiation process if it is done properly.”

Commenting on the speed with which Pensions Trustees will need to act, Samora Stephenson, Senior Investment Consultant, Hymans Robertson, says:

“If trustees want to avoid making decisions in haste ahead of June, fiduciary management tendering needs to be at the top of their agendas. We urge schemes to ensure that they put full effort into the process and if needed seek help and guidance from advisers for their schemes, regardless of the pressing deadline.”