What is an independent trustee?

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What is an independent trustee? I have heard the term before, but not really thought about what it means until now, as I have to write an assignment on the topic.

I have done some research into the term and the key points I have gathered are these:

An independent trustee is a professional with a complete pensions focus. Most independent trustees have previous experience of working in the financial industry and are often former actuaries, lawyers, investment managers or investment consultants, so have the benefit of experience which they can bring to a pension scheme (DB, DC and hybrid), along with a truly independent viewpoint, making them able to contribute to trustee discussions  and make better quality decisions that focus on the best outcomes for members.

Sounds good so far, so what does an Independent trustee do? Turns out, they do quite a few things, a couple of examples are:

They oversee the management of ever increasingly complex pension schemes. Pension schemes now have to deal with a variety of issues such as new regulation, greater diversity of investment products and scheme deficits, which can be very time consuming and can/do present conflicts of interest for lay trustees.

One of the benefits of hiring an independent trustee is that their experience and knowledge means that they can confidently approach/challenge external consultants and equally they can help to manage conflicts of interest within a company, for example, a finance director who is also a trustee has to make decisions regarding deficit funding and employer contributions which lead to conflicts of interest with the employer, can instead be passed to the independent trustee to tackle.

Independent trustees also look to work with trustee boards to review the governance (governance is making sure a company’s operational processes are robust and responsible) of the pension scheme and suggest changes that will either improve existing operations or make them more efficient and cost-effective.

However, there are lots of other types of work that independent trustees do, for example, they can be the Chair of Trustees, help with DC Governance, Pension or Sole Trusteeship, give Investment Committee Support and there are also other Governance roles. Check out www.bestrustees.co.uk for details on each of these services and further information on independent trustees.

Marketing hmmm…

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I was reading an article the other day discussing the differences between in-house marketing teams and marketing companies. Many large companies tend to have their own marketing teams, whereas smaller companies may have one or two people that are tasked with looking after marketing.

In-house marketing teams (typically) know their company and its business and associated products/services very well and focus on marketing them in the most appropriate way for maximum exposure and audience reach. However, in both large and small companies, there is sometimes a need for an external marketing company to assist with marketing projects, as a company may need specialist expertise in certain areas such as brand identity, marketing plans, company collateral, integrated campaigns, websites, digital and social media (to name a few) or may simply want to outsource a particular project.

Typically there are a few ways marketing companies work with businesses. For example an company would partner with a company on a project, or if required they can become part of the in-house marketing team to drive projects forward with the benefit of being able to communicate directly with the in-house team.

There are specific marketing companies for various fields, for instance in the financial services industry there are several companies that specialise in corporate marketing. HT Financial Marketing is one such company – their website says they have several years experience in the industry and can add value to your business. Sounds good and I can see why a marketing company can be an asset to in-house marketing teams.

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Hedge funds

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Hedge funds, I mean what are they? You read about on the news and in the papers all the time, and I’ve now got to write an assignment on them.

Met up with my mate in the pub, he is studying economics and explained it over a pint. Apparently, hedge funds can invest in anything around the world, stocks, fixed income (bonds), currencies, options, futures, exotic derivatives and other things. They are less regulated than other investments, making them more risky but potentially more rewarding. . They are made available only to certain investors and not the general public. Hedge funds seek positive absolute returns, so a positive return for the fund in both up and down markets.

Loads of people have invested in hedge funds and have made a mint. But, all still sounds a bit complicated to me. Examples of Hedge Funds: Markham Rae & Man.

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