GLOBAL - Towers Watson has created a separate fiduciary management team for its delegated investment business, with Chris Mansi (pictured) appointed as chief investment officer for the business. A decision - expected within months - has yet to be made about whether the new team will have a dedicated business head.
Mansi, who was previously senior investment consultant at the firm, chairs the UK portfolio construction group. The group is currently 35-strong and UK based, comprising 10% of the companies total UK consulting staff.
In an interview with IPE, Chris Ford, EMEA head of investment - who is responsible for both the advisory and fiduciary management teams - emphasised that the separation would not create two independent entities. Both advisory and delegated teams will use the same capital markets and economics research input, as well as manager research, and access to the company's 'thinking ahead' group, led by Craig Baker.
However, Ford highlighted the importance of creating a team that would be able to concentrate solely on delegated investment clients.
"In the fiduciary management relationship we have the obligation at every point to be applying the right level of resource in time to be doing the right thing, irrespective of whether the client has asked us or not, so you need to resource it in a different way," Ford said.
He contrasted this with the role of consultants in an advisory relationship, where the client chooses which issues should be considered and usually does this at a series of meetings, often over months or even years. Although the work uses the same investment view and inputs in either case the delivery model is very different.
Ford said it was not viable to have members of the delegated team "dragged off" to work on other projects or clients as the need arose. "It's a different team and a different skill mix," he said. "The separate team is to make sure we operate properly, not that we are giving different advice to clients."
He added that among some of the perceived conflicts, the only real one occurred when the client decided between the advisory or delegated model.
"Even at this point it is not the delivery method that creates the conflict, but simply that under the delegated model the providers undertake all of the work they think is necessary to do the job well which is often 3-4 times more work in a given time period than clients usually ask for in the same time period."
Ford also said clients need to understand delegated investment services it as a value proposition, spending more overall on portfolio construction and risk management, but with lower implementation and manager fees as a trade-off.