GERMANY - German institutional investors' continuing reluctance to outsource to external advisers is hindering the take-up of fiduciary management services, according to industry experts.

Benedikt Kutschera, senior investment consultant at Towers Watson in Frankfurt, said there was a fear of delegating too much of the decision-making process, particularly as the legal framework states that the pension fund ultimately has responsibility.

Joachim Meyer - managing director of Meyer & Cie. Allokationsberatung, a management buyout of Swiss consultancy Complementa's German operations - said that while German investors had outsourced more decisions to consultants since the financial crisis, they still wanted to "remain in the driver's seat".

For Marcus Burkert, managing director at Heubeck-Feri Pension Asset Consulting, the new risk management requirements under MaRisk have led to institutionals demanding more in-depth knowledge.

"Pension funds are more professionalised," he said. "They want to know and understand things, and they know they cannot buy a black box."

Patrik Bremerich, founder and co-owner of RMC Risk-Management-Consulting, has been critical of the fiduciary management concept, arguing that the outsourcing of the management decision is "contrary to the basic philosophy of consulting".

But Oliver Dräger, senior investment consultant at Faros Consulting, said he saw more and more clients asking consultants to "take an active role in managing assets".

He added: "At the moment, it is mostly the asset managers offering this all-in service. However, it would be more credible if consultants, rather than asset managers, were to offer these services - only, of course, if they are not offering products themselves."

Read more on the German consultancy landscape in IPE's March issue.