More than half of professional trustee appointments are now sole trustees

Sole trustees now represent half of all professional trustee appointments across UK pension schemes, representing a market shift over last year, according to the latest annual professional trustee survey from LCP.

According to LCP’s report, almost half of all professional trustee appointments are now sole trustees, representing a market shift over the last year.

It said it saw a 30% increase in the number of sole trustee appointments over the last year and double the number of sole trustee appointments since the first survey in 2021.

LCP believes this trend in the professionalisation of trusteeship is likely to continue – with the growth in the number of professional trustee appointments by firm over the last four years.

The industry also expects this continued trend based on the levels of recruitment by professional trustee firms over the last year, the survey indicated.

There is circa £1.2bn of defined benefit (DB) scheme assets under management (AUM) by professional trustee firms surveyed by LCP. It noted that the total AUM is concentrated across five firms – with 90% of AUM with LawDeb, Independent Governance Group (IGG), Capital Cranfield, BESTrustees and Vidett.

LCP’s data also shows that different firms are more dominant in the different segments of the market. It noted that LawDeb and IGG in combination represent around a quarter of the total professional trustee appointments by number, but represent over half of total AUM. This highlights a focus by these firms to schemes at the larger end of the market, LCP said.

Scaling up

LCP said it saw “greatest levels of recruitment” over the past year by IGG, Dalriada and Vidett, which it said indicates that they are increasing headcount to scale up to support further growth.

In June Vidett expanded its UK team with four new hires and three more just last week, while IGG welcomed 12 new joiners over the course of December and January.

LCP added that survey responses also indicated strong recruitment amongst the larger firms into non-trustee director roles, in part to support succession planning and developing the future trustees of tomorrow but also reflecting expansion into delivery of wider governance services.

The firm added that the overall headcount for each firm also reflects the differing operating models in expanding non-client facing roles – with IGG, Dalriada and Vidett notable for the smaller relative proportions of trustee directors to non-trustee staff.

It added that BESTrustees, PAN and Capital Cranfield currently have more of a focus on trusteeship roles, which it said is reflected in the composition of the overall headcounts of these businesses. It also noted that Capital Cranfield is continuing to see increased demand for its secretariat and sole trustee support services and so it would expect the composition of its firm to change over time to reflect this growth.

By contrast, the report showed that PAN and BESTrustees have no plans to move their focus from pure trusteeship.

Nathalie Sims, partner at LCP and head of strategic pension relationships, said: “This year’s report comes at a crucial time as the pensions landscape rapidly evolves through increased growth, new government reforms and interest from TPR.

“Following another year of significant growth in the professional and sole trustee sectors, the focus is now on how the industry will adapt—with accelerated growth, demand for streamlined offering, and greater oversight from The Pensions Regulator shaping the future.”

Sarah Smart, chair of The Pensions Regulator, welcomed LCP’s insight and said the regulator recognises the risks and opportunities presented by the development of the market and the various ownership models, including “the potential for higher standards and greater assurance as well as the concentration of decision-making in the hands of a few and detaching decisions from the membership”.

She said: “As set out in our Corporate Plan, we will continue to target our approach to the market in a strategic way, with savers’ interests at the heart of our approach.”

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