The relationship between master trusts and the asset managers they instruct varies hugely from provider to provider. Four master trusts – Fidelity, L&G, Now: Pensions and Standard Life – use exclusively in-house funds in their default, which is entirely appropriate and understandable given their business model. It is notable that competitors also use components from some of these providers.

Trustees of vertically integrated providers do have, technically speaking, the ability to switch to another manager in the event they decide their incumbent provider is not delivering. Whether we will ever see this happen remains to be seen.

The cost of switching assets over from one provider to another would mean performance would need to be especially bad for this to happen. However, such an eventuality could arise in the future if the asset management arm of a provider underperforms consistently for a very long time. Given the scrutiny of investment consultants and fiduciary managers in the institutional pensions sector through the Financial Conduct Authority and the Competition and Markets Authority, regulatory focus on this area should not be ruled out.

Of those that submitted data, 10 use a single asset manager, while seven use multiple managers. Nest uses the most, engaging the services of nine different asset managers for its target date fund range (as at 31.3.18).

Index expert BlackRock is by far the most widely used asset manager in terms of the number of propositions using it, with eight out of 20 master trust default using it for some or all of their portfolio. LGIM is the second most widely used, in terms of scheme numbers, used by six master trusts, including its own. State Street Global Advisors and Aberdeen Standard Life are both used by two master trusts that supplied us with data for this question.