The market for consulting firms in Germany is undergoing significant change, particularly in occupational pensions, as firms seek to gain market share through acquisitions.
The transformation is being driven by a combination of legal reforms, economic conditions, evolving corporate requirements and technological developments, including advances in artificial intelligence, according to Hanne Borst, head of retirement Germany at WTW.
Legal developments include reforms aimed at expanding defined contribution (DC) pension funds in the second pillar and plans to introduce private retirement products without guarantees.
The government has also appointed a pension commission (Alterssicherungskommission), which is expected to consider auto-enrolment in the second pillar as part of a broader reform package.
“Political and regulatory changes directly impact the consulting market and will continue to transform it in the coming years,” Borst said.
The shift away from guarantees in private pension products, alongside increased state support for capital market-based retirement solutions, is also expected to open the market to new competitors.
“Neobrokers, digital asset managers, and fintechs are entering a field long dominated by insurers and banks. For consumers, this means more choice, but also greater complexity and thus an increasing need for qualified, independent advice,” she added.
To remain competitive in an increasingly dynamic pension market, consultancies must combine expertise across capital markets, tax and labour law, while taking a holistic view of all three pillars of the pension system.
“This presents a major opportunity for consulting firms: those who invest early in interdisciplinary expertise, digital processes, and holistic retirement planning concepts can position themselves as trusted guides in an increasingly complex environment,” Borst explained.
WTW is responding to these developments with a strategy focused on expertise, technological capabilities, international reach and, more recently, buyouts.
“We have observed a clear trend towards de-risking for many years. This development is changing the consulting landscape because it requires deeper actuarial, regulatory and transactional expertise,” Borst said.
Consolidation gathers pace
Other consulting firms are also pursuing acquisitions to strengthen their market positions.
Last year, MRH Trowe & Lurse, a subsidiary of MRH Trowe Holding, acquired actuarial consulting specialist Heubeck, becoming the third-largest service provider to occupational pension funds, professional pension schemes (Versorgungswerke) and multinational corporates in Germany.
Meanwhile, Helmsauer Group, a commercial insurance broker owned by Nordic Capital and headquartered in Bavaria with offices in Austria and Switzerland, acquired Konermann & Partner, a broker and adviser to company pension schemes of non-profit and church-affiliated organisations, to strengthen its position in the German market.
Germany also represents a “growth market” for Mercer, according to the consultancy’s country chief executive officer Martin Haep, speaking in an interview with Handelsblatt.
Mercer expects to contribute further to consolidation in the consulting sector.
“There are many excellent small and medium-sized consulting firms in Germany that are expanding our service offerings,” Haep said in the interview.
The firm sees strategic communications, HR technology and investment management as areas of particular interest for further acquisitions, following its takeover of Profil M, a Wermelskirchen-based leadership assessment and development consultancy operating in Germany and internationally.
Profil M will operate under the Mercer Profil M brand, expanding Mercer’s expertise in HR, rewards and benefits strategies and supporting companies in business model transformation processes.
The acquisition is intended to strengthen Mercer’s positioning as an adviser in the areas of people and investments, Haep said.
It follows the takeover of hkp group, a Frankfurt-based consulting firm specialising in human resources and corporate governance, with operations in Germany and the Netherlands.
