Getting the best out of your pension scheme advisers

03 January 2024

Optimising engagement with advisers is an integral part of achieving any pension scheme’s objectives.

Pension schemes thrive when the trustee board, sponsoring employer, and scheme’s advisers all communicate well. From day-to-day tasks to major discussions regarding a scheme’s direction or funding, everyone must be on the same page for a pension scheme to operate to its full potential.

Avoid over complicating communication

Particularly where you have multiple advisers involved in a scheme, sometimes tasks can fall through the cracks and miscommunication can arise.

For operations to run smoothly, everyone must be clear on the pension scheme’s objectives and understand their role. When managed well, effective communication can also avoid unnecessary costs to the scheme.

Think about whether something requires the formality of email or whether it could be addressed in a brief phone call. We find picking up the phone and having a chat is often a straightforward way of avoiding the pitfalls that come with email communication.

Clarify the scope of work

When engaging advisers in either a one-off project or an ongoing basis, clarity of what is (and what is not) in scope is key.

All parties having clarity on what is and what isn’t included from the outset means that any out-of-scope work can be discussed and agreed. Unexpected charges for out of scope work can often be a source of frustration and contention for trustees. These surprises can be avoided when there is a clear scope and agreement at the outset and regular updates where relevant.

Challenge where relevant

Although advisers play a vital role in the successful operation of a pension scheme, trustees should not be afraid to question their advice. As a professional trustee, working with several advisers across numerous schemes provides great insight into what is happening in the market. Just because things have been done a certain way in the past, doesn’t mean they have to be approached like that going forward.

Provide feedback

Providing advisers with constructive and timely feedback can often mean that issues are resolved quickly and can even strengthen relationships, if delivered in the correct manner. It is often hard to have these challenging conversations and people may shy away from them but in our experience “clearing the air” can reinvigorate relationships, ensuring everyone remains aligned with key objectives. It can also work in reverse with advisers feeding back to trustees what is going well and, importantly, what isn’t.

Make necessary changes

If things aren’t working, then don’t be afraid to change them. This could be subtle, such as switching personnel, to a wholesale retender of advisers. There may be instances where you need specialist input that may be out of the area of expertise of your current advisers or they are conflicted – for example in cases of risk transfer, Master Trust selections or fiduciary management oversight.

Consider diversity of thought

The Pensions Regulator’s guidance on Equality, Diversity and Inclusion encourages trustees to “look outside the governing body” to help achieve diversity of thought.

Advisers can really enhance the diversity of thinking for trustees based on their own personal and professional experiences. Utilising this resource for enhancing diversity can undoubtedly lead to improved outcomes for members.

All advisers and trustees ultimately have a common aim, which is a well-run, compliant pension scheme. As professional trustees we work with many different schemes and consultancy firms.

That puts us in a really good position to help build strong relationships between schemes and advisers, enabling trustees to get the most from their consultants and make high-quality decisions.

How ZEDRA can help

ZEDRA can help schemes of any size by finding governance improvements and streamlining cost management or helping trustees with long-term options and plans for the scheme.

Contact Daniel Walsh to find out more.

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