With pension funds still regarded as a new breed, pensions consultants are relatively scarce in France. But a growing emphasis on specialist investment is prompting an increased take up on consultants’ investment services, those in the industry say.
"Pensions consultants started to establish themselves four or five years ago in anticipation of pension funds becoming more widespread," says Jean-Francois Pincon, head of international sales at asset manager Indocam. But funded pensions on any large scale have been slow to emerge in France, not least because of the broad ideological opposition to what is perceived as being an unequal system.
Many funds tend to have their own in-house investment expertise, and often it is the smaller funds which turn to consultants for investment guidance, says Vincent Puche of Finance Arbitrage. "The larger pension funds who are looking for transparency also turn to consultants – this is a very big trend in France," he says.
"There is some growth in the market, but it is a very small market – probably for legal reasons," says Michel Piernnay, chairman of actuarial consulting firm Fixage. Apart from the big players, consultancies in Paris are typically one-man shops, says Pincon.
French institutions, consultants say, are keen to adopt an international outlook and profile, diversifying their fund managers and getting away from a situation where their fund managers are purely local, says Pincon. "Typically an institution would use a consultant for a new asset class – perhaps a specialist class for which they don't have the expertise," he says.
Puche says most pension funds are still looking for balanced mandates, but some specialist mandates too. Among the specialist asset classes clients are currently interested in are emerging markets and corporate bonds, says Pincon.
In France, most pension funds are awaiting the next legislative reform in the pensions field, says Piernnay. In the wake of this, consultants are expected to be called upon to sift through the implications for pension providers.
Despite the public opposition to a new system, funded pensions will emerge eventually, says Pincon. "I believe a system of private pension schemes will develop. People will increasingly become conscious of the need to save on top of their current pensions," he says. Rachel Fixsen

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