In many respects, pension trusteeship as a profession is still in its infancy: a little acorn that wants to become a big oak tree.
Anyone can set themselves up in business with no qualifications and put themselves forward as a professional trustee. Levels of skill, expertise and experience can be highly variable. Just because trustees are being paid does not always mean they are displaying characteristics which the purchaser of services would consider “professional”.
Trustees are now coming together to define a set of standards that people putting themselves forward as professional trustees must follow.
The Pensions Regulator (TPR) is also involved and this group is known as the Professional Trustee Standards Working Group (PTSWG). The aim is for these standards to raise the quality of professional trustees and to eliminate poor practices from the market. Going forward, the PTSWG will be developing an accreditation framework for professional trustees to comply with. Professional trustees that I have spoken to are very supportive of the work the PTSWG are doing, as am I.
As an experienced trustee, my view of other professional trustees is that they are generally well-qualified, intelligent, diligent and honest pensions people. They all seem to have a high level of experience working with pension schemes. The slightly odd thing to me is that there are different structures that these trustees operate within. Some act as sole traders, others operate as part of a franchise working ostensibly by themselves, but with a central support function, and others work as part of a structured office-based trusteeship team.
The profession should now be looking forward to a time when it can attract younger members full of verve, dynamism and passion to take pension trusteeship forward.
To me, the work of the PTSWG, and the future direction of the profession, will put these structures under pressure. These structures may develop, evolve or disappear altogether.
As a qualified actuary, I am used to high professional standards. I have worked in consultancies where strict “do-check-review” processes are in place to help ensure correct advice is provided to clients. The trusteeship profession, I believe, should look to such other professions when considering the model it uses for its members. Doing this will surely mean that we have more recognisable structures and well-defined processes in place. With the work of professional trustees guided by these structures and processes, we should expect better member outcomes. After all, that is what it is all about.
Recent high profile cases of BHS, Carillion and British Steel have brought the role of the trustee board into sharp focus. Given the outcomes in those cases, we may now get challenges to the various professional trusteeship models. How robust are the processes and procedures being followed? How rigorous is the peer review?
Looking at the market more generally, some appointments are taken by sole traders and others taken by corporate trustees using a team-based approach. The market supports both. But helping the purchaser decide which is optimal for their own case would be an area where the profession can assist.
The aim is for these standards to raise the quality of professional trustees and to eliminate poor practices from the market
Another aspect of being a profession is the concept of making a career from trusteeship. Most professional trustees have already had their career and are now working as a professional trustee prior to their full retirement. The profession should now be looking forward to a time when it can attract younger members full of verve, dynamism and passion to take pension trusteeship forward. Whilst professional trustees who have already had their career elsewhere still have a lot to give today, it is those younger members who will be the future of this profession. Professional pension trusteeship is growing fast and we need younger members, working in a structured environment, developing their careers over many years, to become the best possible trustees they can be.
The next stage in the profession’s development will be the accreditation framework. We do not know what this will look like yet; who will monitor the performance of professional trustees, or who will have the power to authorise professional trustees to practice. Clearly, this framework will define how the profession develops over the medium term.
Only when we have formal processes in place, high-quality new entrants joining earlier in their career, and a fullyfledged accreditation framework, will we grow as a profession.