Back to Reality Part III – Fiduciary Risk

In this series, we address and challenge common misconceptions that have led to the increased prevalence of passive investments in defined contribution (DC) schemes. To help trustees and corporate advisors weigh the pros and cons of active management, we perform a reality check on each misconception, referencing fiduciary principles and market and member survey data. This installment addresses the misconception that passive investment options reduce fiduciary risk, defined as the risk that the scheme services and funds do not achieve value for money.1