UK consulting actuary firm Bacon & Woodrow and US consultants Callan Associates are set to unravel their global consultancy relationship, following the announcement of the merger of Bacon & Woodrow’s employee benefits practice with US group Hewitt Associates.
Bacon & Woodrow will also be withdrawing from the Woodrow Milliman network of consultants, although the firm says it will continue to work with member firms where it is in clients’ interests and is currently seeking to build an alternative network on the continent.
Nick Fitzpatrick, a partner at Bacon & Woodrow and head of the investment consultancy practice in London comments: “Relationships are good with Callan and we are still talking about what we can do but the likely way forward is that we will have to unravel our relationship.”
He notes that one of the difficulties is the overlap between the Hewitt and Callan operations.
“ The Hewitt investment consulting business is not as sizeable as Callan’s, but it is well regarded and it could be difficult to run both of those horses at the same time as they are very much competing on their own turf.
“It is difficult to see how they could work together. Callan did not want to surrender its ownership and it would be difficult to see how they could develop a relationship given that we have one firm which is part of a big actuarial, employee benefits type practice and another which is a proud and successful independent firm.”
Fitzpatrick notes that Hewitt already has relationships with two investment consultants in Europe – one in Switzerland and one in Holland and says the group is also talking to other consultants with a view to building on this.
“ We hope we can use the Hewitt Bacon & Woodrow name to build a European network – we’ve certainly got to improve our coverage in Europe.”
Asked whether this would involve a move away from the relationship type approach of the Woodrow Milliman network, Fitzpatrick adds: “ It is still early days yet. Bacon & Woodrow and Hewitt will become one company and it will be good to operate under a single brand name. However, the extent to which we want to push that model will be looked at.
“The model of ownership need not necessarily apply across Europe because investment consultants are independent people and they value their independence and we will look at the situation to work out what the financial situation should be.
“We think we have a good platform, but we still have a lot of work to do and we don’t want to kill the entrepreneurial skill of investment consulting.”
Fitzpatrick says he expects that by the end of December the situation will be clarified.