COMMENTARY - The news that Mercer is getting an excellent response for its new multi-management offering is interesting.

It came just days after multi-management specialist RMB admitted it’s not been as profitable as it wanted and that it had had to make redundancies.

As in everything in the industry at the moment, it seems, it all comes back to scale.

How can smaller players such as RMB – and names such as MM, which has also seen a staff exodus – be expected to compete with the marketing and research muscle of the big boys?

What exactly can they offer clients that a well-resourced shop like Mercer cannot? Mercer has decided to make the strategic move into multi-management – with good reason. It can make use of in-house capabilities and client reach that the specialists can only dream of.

Whatever the conflict-of-interest qualms there may be – which Mercer of course would deny – the fact is that its entry into the market represents at the very least a wake-up call to the incumbents. They will see a consulting firm offering an asset management service like this as the very last thing they need.

Just last month, don’t forget, Watson Wyatt unveiled its new ‘Advanced Investment Solutions’ offering – which will see the firm take on more responsibility within clients’ portfolios with more of a manager of managers approach.

When SEI started offering multi-management, it took the step of withdrawing from the consulting market.

But the question is: what will the impact be for the client, the pension fund? Quality research delivered via a handy platform may be all well and good. But a reduction in choice and the concentration of power in fewer and fewer hands may not be the best outcome for hard-pressed trustees. Interesting times.