UK- Consultant Towers Perrin has announced an alliance with Frank Russell under which it will promote the latter’s multi management product for its UK pension fund clients.
Following the deal, Towers Perrin while cease its fund manager research operations and concentrate on its core business of actuarial services.
Towers says it will focus on financial management strategy, asset liability management, asset allocation, investment manager structure and financial education for employees.
Alan Botterill, Towers Perrin managing director for Europe, said: “we believe that pension plan trustees who need active fund management should appoint a third party to make the manager selections on their behalf and to be fully accountable for the results.
“Russell is the global market leader in providing manager of manager investment products and complements Towers Perrin’s existing actuarial, administration and pension consulting activities in the UK.”
Critics suggest Towers’ UK investment consulting business was dwindling anyway and it has seen a large number of consultants leave over the last three years, the most recent of which saw Phil Tindall quit to join IBM in a pensions advisory role.
Towers says the decision to link up with Russell is due to a belief that the investment consultancy model is flawed. Speculation that the deal is a harbinger of things to come, however, is dismissed by those that dominate the UK market.
Andrew Kirton, head of Mercer’s UK investment consulting practice, says: “there is this erroneous assumption that investment consulting is no longer profitable.” Mercers has no intention of winding up investment manager research and selection.
Likewise at Watson Wyatt where head of European investment consulting Nick Watts says they have no plans to enter the fund of fund business. He says they have invested, and will continue to do so, in manager and asset class research, areas he refers to as “cornerstones of the business.”
Jon Bailie, managing director of institutional investment services at Russell, said of the announcement: “Towers Perrin’s selection of our manager of manager services is a great endorsement of our approach and products.”