UK - Consultants have rejected claims they dominate a scheme's decision-making processes or that their performance is rarely assessed by trustees.
The department for work and pensions claims its research showed that only 15% of schemes had overruled their investment consultant’s counsel since the Myners principles were published in March 2001.
And the DWP says only 34% of respondents had mechanisms in place to measure the performance of their consultant.
But Mercer Investment Consulting head of investment strategy Andy Green rejected the findings.
He said: “Trustees do challenge the advice they receive from investment consultants in a number of areas as they want to feel comfortable with what the consultant is doing.
“As an example, many consultants are talking about allocating to alternative asset classes.
But trustees are going through an education process so they can understand and challenge what their consultant says. Trustees do want to debate and discuss things with their consultants – they rarely just accept it.”
The DWP also claimed that trustees rarely tender investment consulting briefs. It said only 28% have held a competitive tender process within the last two years, compared to 44% which had held tenders for fund managers.
Hewitt Bacon & Woodrow head of investment consulting Andrew Tunningley said: “A lot of trustees will disagree with the DWP’s claims.
They are not stupid people. It is clear that clients are reviewing their advisers in a proper way, and that has led to more tendering. There’s been a dramatic change in the landscape.”
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