The merger between Aon Consulting and Hewitt Associates marks yet another step in industry consolidation.
Last June, Watson Wyatt and Towers Perrin announced they would merge to form Towers Watson (GP Online, June 29).
And, last Friday, Xafinity said it had bought PricewaterhouseCoopers' scheme actuary, pensions administration and investment consulting business for an undisclosed sum (GP Online, July 9) - a move that came just over two years' after Xafinity stated its objective to be a consolidator within the pensions market and bought Hazell Carr in 2008.
The rationale behind these mergers is clear. These firms want to broaden their service offering and, perhaps more importantly, benefit from economies of scale.
This, the theory goes, should lead to lower fees for clients such as pension schemes, trustees and corporate sponsors.
Yet - even if schemes do get a broader choice and lower fees - there are three elements to this which could be less positive for clients.
Firstly, there must be a huge number of pension funds out there that, over the past couple of years, have chosen one adviser and now find themselves being served by a completely different entity.
While schemes may be pleased with the new merged firms - and many of the individuals involved with their accounts are exactly the same as they were before - there is no doubt that the companies they asked to advise could have now changed beyond recognition.
Leading on from this, the merger process will lead to concerns these firms will take their eye of the ball when dealing with various integration processes.
Finally, such mergers reduce choice for schemes. At the beginning of last year, pension funds and trustees had at least five sizeable firms of advisers to choose between. Now they will have just three (Towers Watson, Mercer and Aon Hewitt).
Generally schemes choose one consultant over another for a reason, and therefore when that changes you have a right to be suspicious. The problem now is that you have fewer providers from which to choose.
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