UK - Consultants have been warned that they must be prepared to take on increased liabilities if they launch their own investment products.
A senior consultant – who does not wish to be named – says firms will need to be capitalised and run to FSA standards.
But he believes this will be difficult for limited liability partnerships because they do not have the backing of large corporations to provide capital.
A rash of consultants have set up manager-of-manager operations.
But the consultant said: “Consultancy was always something for which it was very difficult to be held responsible for by the clients.
“It was something that you really didn’t need too much capital for.
“As a fund manager though, your liabilities are much greater as you are handling clients money, which consultants never do.
“So you are in line for money laundering procedures and the rest of it.”
Buck Consultants senior investment consultant John Walbaum said that firms could minimise risk if clients’ money went directly to the underlying fund managers.
But he believed this was unlikely to happen.
“Money will have to go through the consultant at some point, in which case, there is an element of liability there.”
The Co-operative Group's Somerfield Pension Scheme has completed a buy-in with Pension Insurance Corporation (PIC), insuring the benefits of its pensioner members.
Caroline Rookes CBE and Michele Hirons-Wood have joined The Pension Superfund's board of trustees to focus on maintaining governance standards and safeguarding member benefits.
The first specialist independent firm advising pension schemes on bulk annuities or moving to a consolidator has been set up with ambitions to shake up the market.