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Europe's markets come the consultants' way FRANCE

France is still a relatively new market and while there is increasing investment consulting activity, the majority of RFP business is bypassing the consultants, around 60% in fact, according to Philippe de Compte at Invesco in Paris. The main players in France at the moment in terms of investment consulting are Frank Russell, Watson Wyatt, FIXAGE and Finance et Arbitrage, the latter two are both also active on the actuarial side of the business. Aside from manager selection, consultants are advising on choosing an appropriate benchmark and giving asset allocation advice.
The small and medium sized pension funds go for the French consultants typically and as in other markets the larger multinational corporations opt for the international players. The accountancy firms have a presence in the market and are said to be intending to access the investment consulting market, though little has been seen as yet in way of RFPs passing through them.
There has been little improvement in the pensions side of the market as France still awaits its pensions law which is expected this year. The major issue in the HR departments at the moment is the proposed 35 hour working week which will come into action at the beginning of next year. Companies in preparation are reviewing their outlays and finding ways to cut down on costs and there is a trend amongst companies of switching from defined benefit (DB) to DC schemes. There has also been an in-crease in company employees looking to private plans to provide pre-retirement collective agreements and there are also more unit linked contracts appearing in the French market. On the investment side, equities are becoming more popular though investors are still shying away from real estate. The role of the consultant in general is increasing though France and the insurance brokerage firms are stepping up the pressure, becoming more active in the pensions and benefits arena and competing against the consultants for business. However there has been an increase in third party consultancy turnover who are becoming more involved in the design of new plans. The ALM concept is trying to be introduced by both the consultants and the insurance companies in France though the take up has been limited. Two of the leading insurance companies in the pensions arena who are becoming active in the ALM areas are La Mondiale and Cardife, and the larger pension fund clients such as IBM France and Elf have adopted the techniques though they do not represent a widespread industry trend.
The amount of total assets is about FFr150bn so it is very small compared to what you have in the UK or US," says André Auclair at consulting firm Eparinter. Rachel Oliver"

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