UK - Investment consultants have been given a resounding vote of approval by UK pension funds for services delivered, but questions have been raised about their value for money along with the need for improve communications.

Details of research conducted by the National Association of Pension Funds (NAPF) indicates officials at UK defined benefit and defined contribution pension funds are largely happy with the services they receive from investment consultants.

But many funds have over the years found it difficult to assess the services delivered and compare them with other firms - an NAPF survey last year found 48% of schemes do not formally assess their investment consultant - so the NAPF has launched a series of trustees support tools to do just that, including a ‘balanced scorecard' to measure firms by and a comparative data analysis template pension funds can use to request comparable information.

Research conducted through telephone interviews with 458 individuals, and 37 interviews with local authority funds, shows pension funds rate their investment consultancies positively, as 91% of DB schemes say their consultant understands their position and that of their sponsor, while 81% respondents rated the quality of technical investment issues to trustees as being very good.

That said, there are some areas in need of improvement it seems, as only 59% rated the delivery of proactive advice as god, given some respondents noted "the quality of advice is fine, [but they are] rather reactive and slow in providing the advice," especially when related to major developments in the market.

Similarly, 42% did not rate investment consultants as good value for money, even though 89% acknowledge the fee structures are clearly set out and transparent, as some officials claim they "found the service expensive and they have always been trying to add on things".

One concern funds did have was the quality of advice being delivered,  as15% of DB officials and 16% of DC schemes questioned believe investment consultants are too slow to recommend manager deselection.

Approximately 27% of DC schemes also raised concerns about the communications to trustees, as 75 DB schemes noted the quality of advice can vary significantly from the firm they employ.

Officials noted investment consultancies are advisers, not the decision-makers, yet 15 DB and 22 schemes said their investment consultancy did not make oral presentations at trustee meetings while, in contrast, advice can include too many possible solutions to a fund's investment management strategy.

Moreover, 27% of DB and 35% of DC schemes said investment consultants need to improve their written communications as clarity and usefulness were questioned, and there were suggestions the reports produced are, on occasions, too long and complicated.