We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What Is Fiduciary Management?

Gerelyn Terzo
Updated May 17, 2024
Our promise to you
WiseGeek is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGeek, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Fiduciary management is a financial formula, but it is also about responsibility. In the financial markets, overseeing assets on behalf of multiple investors requires a high degree of transparency and accountability. In some cases, as it is with pension funds, no one individual or firm could manage the entire investment process. Money managers who are selected under a fiduciary management model could be tied to one or more of many asset classes, or categories of investment, and may be changed in accordance with the policies outlined by the owner of the assets, such as a pension fund.

Pension funds are early adopters of fiduciary management in part because there is often a lack of manpower and resources at these institutions to orchestrate proper money management alone. Typically, a pension fund is made up a chief investment officer, investment team, and board of directors to support or deny recommendations. Also, a third-party consulting firm is often engaged by a pension fund to guide the direction of the investment portfolio. All of these members meet regularly to discuss the direction of a fund. A third-party fiduciary management firm makes decisions on behalf of the pension in cooperation with plan officials and according to an agreeable strategy.

Money in the pension fund that represents the retirement of plan members, or employees, is invested in the financial markets in order to grow the value of the assets. Pension fund managers direct the lion's share of the total portfolio to different asset managers and pay those firms fees in exchange for overseeing the money. The pension then has a roster of different asset managers for various asset classes, such as stocks, bonds, and real estate. Placing the total of pension fund assets into the hands of a fiduciary manager is essentially entrusting that firm with the investment decisions for the fund.

It is not uncommon to hear a pension officer state that a change is being made to that manager lineup as a fiduciary responsibility. If an asset manager is not generating the types of profits that were expected or strays from an original investment strategy that was in line with the pension's direction, fiduciary management would require the pension to replace that asset manager. Fiduciary management also extends to performing adequate due diligence on asset managers before placing any money in the hands of these firms. Lines may become blurred when a fiduciary manager is also a money management firm and a potential bidder for the contract of a pension client.

Pension funds and health insurance firms in the Netherlands were among the first to use fiduciary management. Anton van Nunen is largely credited with having originated the formula. The model eventually gained popularity in other parts of Europe, including the U.K.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Gerelyn Terzo
By Gerelyn Terzo
Gerelyn Terzo, a journalist with over 20 years of experience, brings her expertise to her writing. With a background in Mass Communication/Media Studies, she crafts compelling content for multiple publications, showcasing her deep understanding of various industries and her ability to effectively communicate complex topics to target audiences.
Discussion Comments
Gerelyn Terzo
Gerelyn Terzo
Gerelyn Terzo, a journalist with over 20 years of experience, brings her expertise to her writing. With a background in...
Learn more
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.