“A whole new world” for the professional trustee market as LCP’s Professional Trustee report highlights slowest growth in 5 years

Preliminary findings from LCP’s annual analysis of the Professional Trustee and Sole Trustee market shows slowest growth in 5 years in the number of appointments to professional trustees.

The “Sole Mates” report shows just a 2% growth in the overall number of appointments. The LCP report investigates whether we are seeing signs of a market hitting maturity. As a result, competition is intensifying, and professional trustee firms are being pushed to differentiate more sharply on their value proposition, experience, and specialism to maintain market share.

The survey and report, which will launch in September, highlights that hiring across the market by the professional trustee firms has returned to a more sustainable level after a bumper year in 2024.

Nathalie Sims, Head of Strategic Pension Relationships commented: “The maturing market and increasing regulatory oversight, combined with other market developments such as changes in rules around surplus sharing, means that that the professional trustee market is standing at the threshold of a whole new world.”

Focussing on Sole Trustee appointments, there were over 100 new appointments over the last year, but nearly half of these went to just 3 firms. The analysis shows over 1,200 sole trustee appointments are led by just 224 people. This may further increase considerations around concentration of decision making among a small pool of individuals (further details of the financial decision making power held by Trustees is covered in our Pension Powerbrokers report.) LCP expect increased scrutiny, more detailed guidance, and potentially new legislative guardrails following the DWP consultation, expected in Autumn 2025.

The report reveals that the main drivers cited for schemes turning to the Sole Trustee model are cost savings, having a large project that requires expertise and wanting to increase the speed of decision making.

Other key findings include: 

• Sole Trusteeship is being seen as a way to address a different governance solution for those looking for operational consolidation
• While the majority of sole trustee appointments are still at the smaller end of the market, there are more and more larger schemes with assets over £1bn adopting this model.
• The majority of PT firms now offer sole trustee services that extend beyond pure trusteeship, most commonly secretarial or governance support.

Holly McArthur, Head of Sole Trusteeship commented: “As the number of Sole Trustee appointments continues to grow, so too does the importance of understanding how those appointments are delivered in practice. There is no one size fits all approach and the right model depends on the scale, complexity and objectives for the scheme.”

LCP’s full report into the Professional Trustee market will be published in September.