UK - British consultants should move towards better models of performance measurement, according to panel of speakers at the National Association of Pensions Funds annual conference in Edinburgh today.
Richard Barlow, chief executive of the Electricity supply pensions scheme, suggested that investment consultants could come together to draw up a code of best practice in the same way as transition managers had drawn up the T-Charter.
Meanwhile, Andrew Dyson, head of institutional business at BlackRock, said he believed consultants should be more accountable for their decisions but that given the complexities of some investment products more partnership was needed with the fund managers who had actually designed the products if pension funds were to be properly advised on them.
However, David Morgan, chairman of the NAPF investment Council and a trustee of Coal Pension, warned against the use of league tables for consolations. He said this would lead to money chasing only the top firms in the same way as it had done with asset managers.
He said pension funds would have to accept higher fees for the specialised services consultants provided, especially in an environment were they were searching for sources of uncorrected alpha whilst being aware of capacity constraints.
Paul Trickett, European head of investment consulting at Watson Wyatt, also warned pension funds that unless they were prepared to reward and value independent consultants then the the business model would fail.
He said there was increasing pressure for consultants top move into the area of product provision, where there was a more obvious and lucrative source of revenue.
Standard Life has increased exposure to risk assets in three out of five funds in its Active Plus and Passive Plus workplace pension ranges.
Some 48% of employers are unaware of the services or help they offer to members of their defined contribution (DC) schemes, according to Aon.
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