Professional trustee appointments have grown less aggressively over the past 12 months than the year before, by 8% compared with 11% respectively, new findings by WTW suggest. The consultancy expects growth to slow to 5% over the next three years as the market matures and more schemes transfer to an insurer.

Professional trustee appointments rose to 2,711, WTW found surveying 19 large professional trustee firms. Sole trustee appointments also rose by 8%, compared with 14% growth over the previous period. Professional trustee firms expect these hires – which make up about half of total appointments – to slow down too over the next three years, to 6%.

“Following a flurry of PT appointments over the past few years, rates of growth have started to stabilise as around half of all defined benefit pension schemes now have a professional trustee in place,” said Mustafa Bharmal, director in WTW's Professional Trustee Group.

The 10 largest professional trustee firms now sit on more than 2,400 UK pension schemes as of 2024, up from 2,300 a year earlier, including 43% of defined benefit schemes, recent research by consulting firm Isio found. 
   

   

Prompted by the rapid growth of profit-driven firms in a sector built around fiduciary duty, the Pensions Regulator is tightening its scrutiny of the trustee market this year, having announced a trustee register and particular focus on sole trusteeship. It will examine, among others, the relationship with the employer, and who takes the decisions within a trustee firm that fall under a trustee’s responsibility.
   
TPR chief executive Nausicaa Delfas said professional trusteeship brings new risks and opportunities.

“We expect all new appointments to have followed a robust process, and to protect savers, we have extended our market oversight approach to the 11 largest firms,” she noted.

Nine in 10 trustee firms named the journey to settlement or endgame planning as a key driver of demand for professional trustees at defined benefit schemes. Full buyout, however, then also leads to the end of the appointment. 

“Appointing professional trustees to prepare a scheme for settlement is becoming increasingly common, with smaller pension schemes sometimes moving to a sole trustee model as the scheme gets nearer to buyout,” said Bharmal.

However, he said trustees warn against sudden cliff-edge transitions from a board to a sole trustee, stressing the need for knowledge transfer and communication between the sponsor, the outgoing board and the incoming sole trustee.