GLOBAL - Another fund manager is to offer asset allocation consulting services, fuelling the fierce debate over the increasingly blurred lines between consultants and fund management houses.
Coming only a month after IPN’s sister publication, Global Pensions, revealed that Goldman Sachs Asset Management is to offer consulting services, Credit Suisse Asset Management (CSAM) has confirmed that it is to offer asset allocation and benchmark selection services in selected European markets including the UK and Scandinavia, although its sees most potential for growth in Italy and Germany.
Robert Parker, deputy chairman of CSAM, is planning a major push on the advisory services already offered by CSAM’s strategic advisory group in the US and Switzerland.
He noted that in the UK it would grow much slower because the “role of the consultants is much stronger than other markets, ex-US.”
“We are not offering a traditional tactical advisory overlay. We are offering strategic asset allocation advice and benchmark setting as well as shorter-term [tactical] advice,” he said.
Describing the emergence of asset allocation advice from fund managers as a “big evolution” he added that “the role of the investment consultant, the traditional provider of asset allocation advice, is changing.
The consultants are increasingly focusing on asset liability studies and manager selection advice with clients requesting asset allocation advice from their fund managers.
“Given the poor performance of the markets and of the industry, there is significant client demand for asset allocation advice not just on equities and bonds but also on real estate, alternatives such as hedge funds, and more specialist sub-components of equities and bonds.”
When asked whether there was a temptation to put clients into higher margin products he said: “The glib answer is yes. The serious answer is that if you are biased into putting clients into higher margin products, and that results in poor performance, you are going to get fired very quickly.”
He also predicted the resurrection of the balanced mandate as a consequence of asset allocation advice being provided from within the fund management arena.
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