As demands grow for international reach, consultants are organising themselves into networks. John Lappin reports.

Multinational companies are increasingly considering the pension needs of employees on an international basis. They look to consultants to provide local knowledge backed by international reach.

Many actuarial partnerships have attempted to meet this demand while retaining their independence by organising themselves into international networks on a European or global basis. Many took the step for defensive reasons but membership of a network is also a useful marketing tool.

There is no definitive structure. Most include a co-ordinating secretariat and are financed through membership fees, although a few networks operate fee sharing.

Most networks strongly assert the independence of their members. None plan to develop into groups, although one, Unison, relies upon the benefit expertise of US-based insurance broker Johnson Higgins, with independent actuarial partners filling the gaps in coverage. Standards are maintained through reliance upon national regulation, supported by network codes of practice and regular partner meetings.

Euracs, the European Association of Consultants, was founded in 1982 to provide clients of Britain’s three largest actuarial firms with services in continental Europe. Firms from Germany and the Netherlands joined soon afterwards. Today Euracs is represented in 16 countries, with Barnett Waddingham as sole UK participant, and is Europe’s oldest and largest association of independent firms.

The range of services varies, with smaller firms able to tackle innovative projects by sharing others’ skills and advice.

Euracs secretary George Clare says that, besides referrals and technical advice, the network provides members and their clients with in-depth support on all international pension and insurance company consulting.

Johnson Higgins’ employee benefits arm forms the core of the Unison network but it includes independent partners such as Hyman Roberts in the UK. Hymans joined in 1991, replacing Stuart Wright & Willis, whose merger with a US firm created a conflict of interest.

The network is considering using a finder’s fee for referrals, extending a practice already employed between its UK and US members.

Gail Paterson, a partner at Hyman Roberts, estimates that the company receives around 50 referrals a year. Development plans focus on generating new business and increased contact between its multinational clients and its European counterparts.

UK-based Lane Clark & Peacock is part of the Multinational Group of Actuaries & Consultants (MGAC), an exclusive network set up in 1991. Partner Tony Cunningham says it accounts for 10% of the firm’s business. There are no referral fees and, as with most other networks, no plans to create an international group. Cunningham asserts: We are a group of independent partnerships who wish to remain so.”

Callund Consulting helped set up the International Benefits Network (IBN) in 1988. Mike Wilson, principal consultant at Callund and IBN facilitator, explains: “We recognised a continuing need for technical information on particular countries that was reliable and produced in a timely fashion.” IBN was set up as a limited non-profit-making UK company with operating expenses borne by its members and no fee sharing.

Henk Lunstroo, a director at Kamerbeck Pensions Consultants, the Dutch founder member, says IBN produces a “satisfying volume” of work. Kamerbeck’s membership was prompted by the demands of Dutch multinationals. “We had to offer something, otherwise international clients would have gone to other sources.”

Executive members bear most of the costs, but it also has probationary associate members and correspondent members for whom full membership does not make commercialsense. The most obvious benefit of membership, Wilson says, is “international credibility”.

Referrals are not exclusive but, on the whole, work is referred to member firms or, where they lack a particular competence, channelled through them.

Kamerbeck Consulting is also a member of Asinta, the Actuarial Sciences International Affiliates, which differs significantly from other networks because its founding partner Actuarial Sciences Associates (ASA) is a wholly-owned subsidiary of AT&T.

Founded in 1990, it operates in seven western European countries and has expansion plans for eastern Europe and the Far East.

A fee is charged for membership, while network firms that initiate new business receive commission. Members adhere to a document known as Asinta 2000 and serve a probationary year. Two firms have lost membership by failing to maintain standards.

ASA’s marketing director Philip Wright acknowledges that the AT&T relationship makes the network different. However he adds: “We have established a credible commercial base away from AT&T and it is highly likely that in future we will be an independent company. As the network grows it will become a stand-alone entity.”

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