Be careful

According to Dylan Evans, Stanlib's director of institutional and investment marketing this is based on the move to greater trustee accountability for asset performance and the possibility that trustees will be held liable for poor results.

Trustee concerns are beginning to mount following the distribution of a discussion document by National Treasury indicating that trustees will be expected to set ‘appropriate’ benchmarks for a fund’s investment performance while ensuring that the asset managers they pick meet their targets.

Step up to the plate the multi-manager who can establish the competence of each manager in each asset class, justify the selection, set out the mandate, ensure adherence to the agreed strategy, make adjustments as markets shift, monitor results and provide detailed reports.

Says Evans: “If trustees select the asset managers directly, Treasury argues that they implicitly take on the obligation of ensuring that the selected managers meet appropriate benchmarks.

“If they fail to do so, trustees might then be open to litigation for negligence, possibly in their personal capacity. That’s a sobering thought for anyone thinking of taking on the frequently thankless task of being a trustee.”