Pension trustees and advisers need to build a dynamic double-act

Though each bring different skills and perspectives to the table, pension trustees and their advisers share a common goal, to deliver positive outcomes for their clients.

So, as an adviser what can you do to best support your Trustee Board?

Know your audience

Trustee boards are not one-size-fits all. Take time to understand who the trustees are, how they absorb information and how they would like you to interact with them. Most advisers use standard documents and templates, but tailoring these to a specific scheme helps to keep discussions relevant and to build relationships. Professional trustees and sole trustees may have different training needs from member-nominated trustees, so it’s important to understand the different roles of trustees on the board, what types of training will be most effective, and when it might be more appropriate to spend time on questions and discussion rather than running through basic concepts.

Know your objectives

Be clear about what you want to achieve in every trustee meeting. If you need to reach decisions on specific issues, document those on the opening page of the meeting pack and in agendas. That way, everyone knows what’s required of them before they come to the discussion and can remain focused on the priorities for the meeting.

Do what you say you will

All trustees are under pressure. Professional trustees are involved with multiple schemes, and member-nominated trustees will be balancing trusteeship with other work priorities. We also spend a lot of time in meetings, which limits flexibility in our diaries. So, if you promise trustees a report at a certain time and it’s late, we may not be able to respond to a deadline or will be forced to work in the evening and at weekends. Of course, sometimes there are unavoidable delays, or something goes wrong – but keep trustees updated to help us manage our diaries.

Build trust

Trustees put great faith in the advice that we are given. It has a direct effect on how we carry out our fiduciary duty, so we have to be able to build trust with our advisers from the very start. If we can create a good relationship during straightforward business-as-usual work, everyone will be in a better position when we are faced with challenging decision-making. Advisers can then also understand where the scheme has flexibility, and what circumstances are non-negotiable.

No nasty surprises

Part of building trust is being clear on issues such as fees. Trustees often have to manage relationships with other entities such as the scheme sponsor.

Having clarity on costs and timescales from the start of a project means that no-one spends time disagreeing over unexpected surprises instead of having more productive discussions. Even if it’s not possible to provide exact costings at the start of a project, a realistic estimate and early warnings when work breaches those estimates will help everyone.

Be clear

Part of a good partnership is making sure that both sides understand the materials and advice that they are being given. Avoiding unnecessary jargon, checking understanding and explaining ideas in a different way if trustees don’t grasp concepts are all vitally important. Advisers have to be prepared for trustees to push back and ask for more information or a clearer explanation. And trustees need to feel that they can ask all the questions they need so that they can be confident in their decision-making.

Work collaboratively

There will be times when a scheme’s advisers need to work together away from the trustee board. For example, changes made by actuaries because of a triennial valuation must link with the investment strategy as well. Joining up those debates is best done outside trustee meetings, to help maximise trustees’ time and decision-making. It is difficult to sit in a trustee meeting and endure advisers arguing with each other about technical points, or lack of communication. It introduces a risk that the trustees lose track of what is going on around them and won’t be able to act effectively.

All advisers and trustees ultimately have a common aim, which is a well-run, compliant pension scheme. Professional trustees work with many different schemes and consultancy firms. That puts us in a good position to help build strong relationships between schemes and advisers, enable trustees to get the most from their consultants and make good quality decisions.

I’ve worked with many excellent investment consultants, lawyers, actuaries and others who operate collaboratively with the schemes they support and also been around long enough to see it go wrong. Pension scheme governance works at its best when our advisers are a true partner in sharing our goals and help trustees to solve the challenges facing their schemes.

In summary

By better understanding our respective roles, skills and pain points, we can build strong, lasting partnerships between advisers and trustees to deliver our clients goals.

How ZEDRA can help

ZEDRA can help schemes of any size achieve their goals by finding governance improvements, managing the relationships between advisors and Trustees and focusing on strategic goals.

Contact Kim Nash to find out more.