Mercer takes implemented consulting to Europe
EUROPE - Mercer intends to expand its implemented consulting activities to win business in Ireland and the UK, as well as in fiduciary management in the Netherlands over the next 3-5 years.
It also today announces a rebranding strategy that will see disappearance of the Mercer Global Investments name - hitherto used for its multi-manager activities.
The Mercer Investment Consulting and Mercer Human Resources Consulting names, as well as the names of other business activities, will also be subsumed into the overall Mercer brand.
Instead, the firm is repositioning itself as a financial services provider with a range of services including actuarial and investment consulting, investment management in the form of implemented consulting, as well as pension and benefits outsourcing.
Its plan to expand ‘implemented consulting' echoes the strategies of other major consultancies, such as Watson Wyatt. The service implements and monitors manager selection recommendations and provides additional services such as consolidated reporting and risk management, and is similar to fiduciary management as practiced in the Netherlands.
"We have a strategy, which is to evolve this business into a broader European business over a three-year horizon. Clearly, Holland is one of our priority markets," said Simon O'Regan, head of Europe at Mercer, and who was in charge of the firm's Australian business when implemented consulting was introduced there.
"We are seeing increasing opportunity to grow the relationships we have with our clients and provide them not only with consulting services but outsourcing services of various sorts, in pensions and benefits administration and also in what we refer to as implemented consulting."
Tom Murphy, European head of investment management, added: "From an overall Mercer perspective, we are now in a position to talk to our clients about a continuum of services from ‘ad hoc' bespoke advice all the way to full implementation."
He added implemented consulting was attractive for larger schemes of more than €1bn in assets, noting increasing regulatory and governance demands were driving outsourcing.
"Businesses are more focused on cost and in the UK in particular the number of closed DB schemes is increasing and they become non-core activities," said Murphy.
Mercer's newly-renamed investment management division - the former Mercer Global Investments - purchases the services of the investment consulting division for its own bespoke and multi-manager services but will maintain strict protocols to avoid conflicts of interest.
Investment consulting staff will not recommend the firm's implemented consulting services but clients have been contacted with information on the service.
"As a professional services firm we are very capable of managing conflicts and we have managed conflicts in all aspects of our business, as with any large financial services firm," said Murphy.
"We have rigorous protocols in place…most of our clients are finance directors and chief executives and they understand that so long as the conflicts are managed, they are happy to do business with us."
Mercer Global Investments' European was launched in October last year, but the concept originated in Australia.
The investment management division now manages $16.4bn (€11.9bn) in assets, the majority of which - $12bn - is from Australian clients. Europe has, so far, attracted $700m from 20 clients and globally it added US$5.5bn last year. It expects to reach $1bn in Europe by year-end and at least US$3bn in due course, based on the growth Mercer has seen elsewhere in its business.