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Watson Wyatt to measure its own advice

UK – Consulting firm Watson Wyatt is working on measuring its own investment strategy advice, according to one of its senior consultants.

The firm’s research into its fund manager selections for pension funds is already monitored by Deloitte & Touche. Rival firm Mercer undergoes a similar process. Kevin Carter, a senior investment consultant at Watson, said the firm recognises that this is “only one step in the right direction”.

“So our next step, which we are currently working on, is to have our investment strategy advice measured,” Carter wrote in an article in the Financial Times.

“As with our investment manager model portfolios we developed an approach that could be verified by an outside agency,” said Watson spokesman Paul Deane-Williams.

“So once we have a track record of our strategic investment advice (developed on a real time basis), a company will be tasked with authenticating it - an essential part of the exercise we believe.” He said this was likely to be a minimum of three years away.

Carter acknowledged the difficulties in gauging the quality of investment advice but said performance measurement was “an urgent necessity”.

He said: “In the current investment climate, we are deceiving ourselves it we believe that we can continue to choose our own methods of assessment”.

Last month Watson Wyatt released a four-year track record of its manager research performance, saying that in which all 13 model portfolios outperformed their benchmark.

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