Europe's markets come the consultants' way IRELAND
The Irish pensions consultancy market has undergone its most radical change ever, with the merger of Mercer and Irish Pensions Trust, the longstanding Irish subsidiary of Sedgwick Nobel Lowndes. This gives the new Mercer practice a dominant position, with a share of the total consultancy market of estimated at 50%, and perhaps advising as many as two thirds of the country's top 200 pension funds.
The other Irish consultants appear undaunted by the emergence of this consulting powerhouse with a dominance ranging across the administrative, actuarial, trustee and investment services. As Kevin Goss at Aon Beech Hill puts it positively: The merger eliminates one competitor and must increase our opportunities."
Similarly at the pension consultancy arm of Coyle Hamilton, Joe Byrne says: "We are already being invited for business that may not have come our way before." He thinks there will inevitably be a drift away from the new group by smaller funds, in addition, the inevitable conflicts of interest in mergers means appointments could come their way in M&A situations.
"There will be more competition for government work," he adds.
A pension fund manager is not so optimistic: "I have concerns about this dominant position and I think there is a need for another strong player to emerge."
But the problem is that the second tier firms are much the same size and most have their international tie-ups, effectively preventing regrouping.
"So who is going to form a reasonably sized competitor?" Asset managers are equally alive to the new situation, one says: "If you are not on the Mercer list, you've had it." Another adds: "Should you fall foul of them, it could have a big impact on your business. We were surprised the merger was not referred or that they were not asked to offload some elements of their business." Declaring the merger to be "a super development", Alan Broxson, formerly of IPT, who was previously president of the European Federation for Retirement Provision, points to the challenges ahead for consultants to keep up with the rapid growth in their business. "The challenge is to have enough trained staff." He notes the changes brought about by the national initiative on pensions and the imminent arrival of the new third pillar products, which will have big im-plications for consultants of all sizes.