SWITZERLAND - The line between traditional pension fund consultants and investment managers could become increasingly blurred in the future, the Institutional Fund Management conference has been told.
Speaking during a panel discussion in Geneva today, Goldman Sachs Asset Management’s co-head of European sales, Ruud Hendriks, said he believes there is a need for asset managers to also advise pension funds, rather than just fulfil a management function.
He added that investment managers, in some instances, can give the same advice to schemes as consultants.
“We have a high regard for consultants. But, generally speaking, we see the pieces of advice consultants give and we can do this too,” he said.
“Consultants continue to play a very, very important role for trustees,” he continued. “But advice-giving is something that investment banks, for example, can do.”
He added that there will be “increased blurring between the typical consultant and typical asset manager”.
Some fellow panellists agreed, stating that asset managers are increasingly understanding the problems affecting pension funds, and are engaging in dialogue with consultants.
Martin Gilbert, chief executive at Aberdeen Asset Management, said he “largely agreed” with Hendriks.
He said: “Fund managers understand what the finance director wants. If the fund manager doesn’t, then investment banks will step in.”
However, Dukere Asset Management president Roberto Falzoni, stated that asset managers should “stick to what they do” and “create value”, while advisers should “provide possibilities”.
In an earlier panel discussion, chaired by former Watson Wyatt partner Sue Douse, it emerged that investment managers could face increasing competition from multi-managers, and come under greater pressure to provide multi-manager solutions.
According to independent multi-management firm, Investment Manager Selection Limited (IMS), independent multi-managers should expect to see large inflows and experience significant growth in the next five to 10 years.
This will largely be spurred on by the emergence of DC schemes creating a situation similar to that in the US.
IMS chairman Richard Timberlake also questioned the scope for growth of large consultants that offer multi-manager solutions. There is also the issue of a potential conflict of interests.
Mercer HRC global consulting director Divyesh Hindocha, stated that consultants and multi-manager solutions can exist in the same business, but it is important to keep the two separate.
He told IPE that consultants are very reluctant to push their own products because maintaining the consultant-client relationship was the most important issue.
He added that multi-managers would have to prove themselves in the market.