Europe's markets come the consultants' way GERMANY
The German market has been traditionally dominated by the 'three H's' - Höfer, Heismann who linked up with Buck, and Hubener, now known as Aon Jauch and Hubener. While all three specialise in actuarial advice the trend seems to be moving more towards the asset side of the business and international managers are moving in for their slice of the market. They are moving into another direction as well, manager selection, but they are not there yet," says Christa Schöning, head of institutional sales and marketing at Metzler Asset Management in Frankfurt.
The Mercer SNL venture has now given Mercer more exposure in the market, Frank Russell and Towers Perrin are also developing their operations and all are hiring local talent. PricewaterhouseCoopers is leading the accountancy attack, and has established a second pillar pensions arm in Germany.
Multinational consultants are not surprisingly focusing in on the big names. On the investment side, local providers FERI Trust, Risk Management Consulting, Alpha Portfolio Advisors and Georg Seil Consulting are notable forces in the market. "All of them are pretty new to the market and introducing the idea of consulting to the German market," says Schöning.
Deutsche Bank has set up an advisory section on AS fonds called PPG based in Wiesbaden and other asset managers look set to follow in response to clients' growing interest in performance attributes although the performance measurement side has not been a growth market as yet .
"Performance measurement has not really succeeded in the past - DPT has not really taken off neither has WM," says one German manager.
Consultants are keeping a keen eye on regulation, particularly the 'Third law to promote the German Financial Trade'. Freedom of investment is the Holy Grail lying at the centre of the proposed reform. Reform of the German tax law is also of great importance to the market which is still currently under discussion.
The euro has reshaped the way consultants are viewing the German market in terms of prioritising where the main markets in Europe are to do business. "A lot of competition is coming in from the Anglo Saxon side as well as France and Switzerland and they are all building up their asset management companies," says Schöning. "They are all educating our German clients so the clients are becoming more sophisticated, and of course the consultants are coming in or will increasingly come into the market." While the consultancy business is without doubt growing, the German consultants still hold the trump card when it comes to building client bases it seems, based on the culture of clients sticking with local expertise, despite international consultants hiring local players to get a better understanding of the market. Rachel Oliver"