US managers not waylaid by markets, says Mercer

US - Despite the current worldwide down turn of the stock markets, US investment managers are largely staying on course rather than changing their business strategy, according to a recent survey by consultants William M Mercer.

Many of the surveyed managers are stepping up client communication rather than reducing staff, says the consultant.

Less than half (44%) of the respondents said they have actively sought to reduce costs in response to the bear market. Most of those seeking to save costs are targeting operations and administration (88%) and marketing and sales (65%). Investment management (65%) and client servicing (53%) are not hit that badly in the downsizing companies, according to the survey.

Publicly owned firms, which are subject to quarterly earnings pressure in the US, are more likely to take short-term views, with 56% looking to reduce costs, compared to 29% of commercial companies.
New initiatives are not hit particularly badly, according to the survey, as 27% of the firms reported planning to postpone new administrative and operational initiatives, and 23% saying they would postpone new marketing initiatives.

Almost two-thirds (63%) of the survey respondents have curtailed their hiring plans or are considering doing so, but few (19%) have made or are considering staff reductions in response to the market slowdown, says the surveyor.

Mercer Manager Advisory Services conducted the survey in April 2001. Thirty-two senior executives at major investment managers responded to the online survey, representing more than US$3trn (e3.5trn) in total assets under management.

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