Buck Bond Group
Avoiding expert bias when looking at what is important to others

Avoiding expert bias when looking at what is important to others

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Having been a qualified actuary working in the pensions industry for over 25 years, I knew I had a good grasp of the needs of trustees.

As an expert with a ‘techie’ actuarial and investment background, I assumed that the most important thing was to provide trustees with a solid journey plan, linking funding and investment policy to drive certainty of the delivery of member benefits. I understand that the success of the journey plan is complex and depends on the collaboration of many parties, and with many different variables that can often be difficult to interpret for the lay trustee.

I thought surely the most important thing to the trustees is my area of expertise and the successful implementation of a well thought out journey plan within an agreed time horizon.

It turns out that I was wrong. Given around a half of all pension schemes have an independent trustee with similar expertise, I did a quick survey on what they valued most.

The technical aspects of running pension schemes are now a given for many independent trustees and, whilst required, were never mentioned when discussing their needs. Getting straight down to the summary results of an actuarial valuation, fund manager change, or a de-risking opportunity, and deciding on action quickly is now expected, as the underlying analysis is assumed, and is being increasingly commoditised through improved technology.

The overwhelming feedback from independent trustees is about cutting through their day-to-day governance burden by automatically providing succinct, relevant information. In the short-term, they are focussed on providing metrics to cover off ESG, fee transparency, audit, and meeting the increasing governance requirements efficiently. Their longer-term needs focus on avoiding future delays by cleansing data well in advance of moving to buyout or another consolidation option (some of which we might not know about yet). Bringing it all together – their overwhelming need was to receive fully integrated, all encompassing advice that focusses on achieving strategic goals efficiently without the frictional costs and conflicts of silos.

Pension schemes are complex, but they don’t need to be complicated for trustees. As advisers, our goal is to supercharge the endgame by providing certainty around technical and governance support for a known cost. We need to avoid sucking time from the important decisions and bigger picture strategy – and ensure that the techie analysis powering our advice is hidden in the background.