Treasury guidelines resulting from the Myners Report could result in a sharp increase in the amount ...
Treasury guidelines resulting from the Myners Report could result in a sharp increase in the amount of business for fund of fund managers, according to Aegon Asset Management.
Its head of fixed interest Malcolm Jones said that if pension fund trustees are concerned about abiding by the additional requirements from the Treasury announced earlier this month, they could be more inclined to defer judgement to institutional fund of fund managers.
He believes this is most likely to affect smaller scheme trustees as they might be concerned that they lack the relevant expertise to make investment decisions.
Ian Eggleden, president of the Pensions Management Institute, expects an increase in the reliance on fund of fund managers. He said: 'Many small and medium sized funds will want to delegate as trustees are increasingly worried that they are not matching up to the Myners principles.'
He argued that the time saved and the expertise acquired made up for the additional cost incurred from higher charges. Eggleden said that the increased burdens would discourage new trustees from taking further responsibilities.
Jones argued that by appointing a fund of fund managers, trustees effectively escape the responsibility of asking those questions themselves.
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