LCP’s fourth annual Professional Trustee survey, published today, reveals that Professional Trustees are quickly becoming the new normal, with a step change in the number of Sole Trustee appointments.
This year’s Sole Mates report shows that for the first year since the report’s launch in 2021, we have seen the balance tilt towards 51% of UK schemes with a Professional Trustee, of which a quarter have appointed a Sole Trustee; Sole Trusteeship saw a 30% rise in the past year alone, doubling in numbers.
LCP shows that five professional trustee firms hold 90% of the DB assets covered by the survey. LCP expects this trend to continue, driven by strong recruitment growth by the firms over the past four years. Over 190 people have joined professional trustee firms since June 2023, suggesting no slowdown in growth across the market.
With the increasing complexity of ongoing pensions projects and the challenges of recruiting in-house pensions team specialists, schemes are looking to outsource more services. In response to this market trend, some PT firms have evolved their capabilities to access this market, offering services outside of traditional trusteeship.
Alongside this, LCP has also seen an increase in streamlined Sole Trustee offerings to meet the growing demand for efficiencies. These solutions go beyond governance, covering scheme services and, in some cases, investment management, providing a cost-effective option for smaller schemes.
As the Professional Trustee market continues to transform, LCP anticipates more involvement from the Pension Regulator (TPR) through the anticipated Trustee register, increased accreditation, potentially developing a framework for oversight of PT firms, and inviting some firms into relationship supervision.
Commenting on the report, 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, also commented: “We welcome the valuable insight provided by this, and other, surveys into the development of the professional trustee and sole trustee market. We recognise the risks and opportunities presented by the development of the market and the various ownership models: 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. 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.”
