Book Review

The Trustee Guide to Investment

Authors: Andrew Clare and Chris Wagstaff
Published by Palgrave MacMillan
Reviewed by Steve Johnson, Deputy Editor of FTfm at the Financial Times

According to a recent survey, a typical pension fund trustee spends more time each week making tea than taking investment decisions.
Yet, as this book points out, these 120,000 unsung heroes are largely responsible for managing more than £1 trillion of liabilities (and hopefully nearly as many assets) on behalf of almost 20 million members of UK pension schemes. Its authors, Andrew Clare and Chris Wagstaff, are both trustees but acknowledge that most of their peers are little more than enthusiastic amateurs.
Consequently, this guide does not assume too much prior financial knowledge. Instead, the reader is taken on a journey from the pension fairy to hedge funds and complex financial derivatives in a series of bite-size nuggets that could easily be consumed while waiting for a kettle to boil.
The length of the glossary, at 48 pages, gives some indication of the breadth of the book, but this is no dry treatise; the section on behavioural finance ably illustrates the authors' light touch with a series of teasers designed to bring the most confident reader back to earth.
If there is one criticism, it is that fees - a proven killer of investment returns - do not get a section of their own until page 500 (two pages before sex). But any pension scheme member would sleep easier knowing their trustees had at least sipped at this fountain of knowledge.

The Trustee Guide to Investment (Palgrave Macmillan, £35) by Andrew Clare, Professor of Asset Management at Cass, and Chris Wagstaff, Visiting Fellow at Cass