Trustee training needs

July/August 2010

Effective training is essential for all trustees. Keeping abreast of the latest thinking in investment, governance and regulation are vital if trustees are to fulfil their statutory duties – and ensure that their scheme is run as efficiently as possible.

But what are trustees’ training priorities? Engaged Investor teamed up with BlackRock to find out. We surveyed 69 trustees, of which 78% were trustees of private defined benefit schemes, 8% were local authority respondents, 8% were private DC and 4% were hybrid schemes. 56% of respondents were member-nominated trustees and 10% employer nominated trustees. The survey took place in early 2010.

Juliet Bullick, head of UK institutional clients at BlackRock, said: “Keeping abreast of changing markets and investment techniques remain one of the major challenges trustees face. We believe that investment managers who are able to provide a holistic view across asset classes and capabilities can play a valuable role in helping trustees navigate this increasingly complex investment landscape. We hope this survey provides valuable insights on how, as an industry, we can help DB and DC trustees achieve their education goals in a more effective way.”

Delivering training

We asked trustees which training methods they found to be the most effective for training. It’s clearly still difficult to beat face-to-face training, with seminars and workshops or short presentations proving the most popular formats. Trustees rated types of training on a scale of 1 to 10 with 10 being the most effective. The average score for seminars and workshops was 7.3 and for short presentations 7.2. Lecture hall-style seminars were less popular, scoring 5.8 out of 10 overall.

Types of training

Although web-based training isn’t everyone’s preferred method of delivery, it is one of the most commonly used, according to our survey, with 41% of all respondents having received training via the Regulator’s Trustee Toolkit and 7% referring to other online training services.

However, face-to-face training, whether through advisers, consultants and asset managers (45%), Engaged Investor’s own forums (25%), other sources such as the NAPF (12%), still remain the most common and popular form of training.

Effectiveness of training

Training clearly has an impact for trustees, as 70% say that they have reviewed their investment strategy as a result of training. Some of the strategies that trustees say they have adopted as a result include:

• Funds of hedge funds
• Liability matching through swaps and derivatives/LDI
• More passive use of index trackers
• Introducing a diversified growth fund into a DC scheme
• A move to absolute return funds, away from equities