UK - Schemes have attacked consultants for charging "outrageously expensive" fees for work that could be done in-house.
Managers and trustees claim many consultants are not giving them value for money and accuse them of simply presenting a mixture of “recycled” data and information that comes from schemes in the first place.
One trustee – who declined to be named – told IPN’s sister magazine, Professional Pensions, that his scheme had received a report from Mercer Investment Consulting, and said the “vast majority” of the work it covered could have been done in-house and at “much lower cost”.
The trustee explained: “The report was not worth the money we paid.
“It told us 80-90% of what we already knew. If you take out the publicly available stuff, there’s not an awful lot there. I make the point about costs, because the things that are done for schemes in some cases turn out to be outrageously expensive.”
Barnardo’s pensions and occupational health manager Graham Brown added: “This is the sort of thing that gives consultants a bad name – churning out information that they have often gleaned from their clients anyway.
“All they do is make it pretty, bind it and hand schemes a hefty invoice.”
Barnardo’s trustees chose not to reappoint Watson Wyatt as its scheme actuary at its last appraisal on grounds of costs.
But Mercer head of UK investment consulting Andrew Kirton rejected the claims and said good consultants helped steer clients “away from the rocks”.
He pointed out that Mercer released performance figures, which “add value”.
“If you have a formal investment manager research process, you’ll be able to track the results of your research, whether the managers you recommend add value relative to the ones you don’t or the benchmark.
“So I would say that the charge ‘do consultants add value?’ is easy to answer – ‘yes we do’.”
The Pensions Trust put its actuarial service contract out for tender last month in a bid to cut the £600,000 costs being charged by Watson Wyatt.
Watson Wyatt declined to comment
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