The ‘Perverse’ Investment Consulting Industry

An article in FTfm yesterday entitled ‘Perverse’ consulting sector slammed highlights the anti-competitive practices of the big three consultancies and the resulting damages caused. We could not agree more with the conclusions of this piece, including:

“The biggest concern is that consultants, who traditionally advised pension schemes on their investment decisions, are increasingly pitching their own asset management services to clients.”

“Last year it emerged that three-quarters of the contracts awarded to consultants for their investment services, known as fiduciary management, were given without a competitive tender.”

“There is further concern that the three largest investment consultancies, Mercer, Aon Hewitt and Towers Watson, have become too powerful in determining how pension funds invest. The quality of the advice they provide has also come into question.”

As a firm which was founded on the principles of integrity and independence, we are pleased to see this story finally getting out to market. It speaks volumes for what ails the pension industry. Gatemore believe trustees deserve better.