US consulting firm Wurts & Associates turns 25 this year, so Amanda White spoke to the founder, Bill Wurts, and managing director, Jeff MacLean, about the company’s transformation and the plans for the next quarter of a century.
1986 doesn’t seem that long ago, but it is, it’s 25 years. Like fashion, a lot has changed in that time, and just like fashion, a lot has come back around.
Back then, according to Bill Wurts – who before establishing his own firm had a 23-year history working for Merrill Lynch’s institutional division – performance measurement and evaluation were the prevailing consulting service.
While many services have been added to the toolkit since then, those skills are very much in vogue following the financial crisis and the subsequent focus on risk.
What has changed, according to Wurts who celebrates his firm’s 25th anniversary this year, is a dramatic improvement in service, with a wider range of services such as asset/liability modelling and asset allocation, as well as a change in fee models.
“It’s now a more complete consulting service, and a big change from just saying ‘here’s where you rank’, to ‘here’s where the problems are and this is how to solve them’,” Wurts says.
Wurts has a diverse range of clients, but most do not have big internal teams so rely on the consultant to make recommendations.
This has been the genesis for the firm to move more towards a discretionary model, and ultimately the development of multi-manager products.
“Every sponsor’s objectives are different, and we want to be able to provide a service for a client that doesn’t want to take the time or expertise to evaluate managers and make investment decisions. On the other hand there are still many Californian counties that want to make their own decisions,” he says.
“We have to have the capability to do more discretionary type services.”
Bill Wurts is still very much involved in the business he set up 25 years ago, and still has some client-facing responsibilities.
“I have a few old-line clients who still like to talk to an old man,” he says.
He still has ambitious plans, saying the company can grow at 20 per cent a year but he has handed over the day-to-day running of the business to Jeff MacLean.
MacLean, who joined Wurts with a plan to move back to his native Seattle but has been in Los Angeles since he joined in 1992, is the majority shareholder and manages the company’s 40-odd staff.
Like Wurts, he believes that implemented consulting will form a big part of the company’s future.
“Trustee boards don’t want to get into every decision of managing a portfolio. It can be very overwhelming for some clients, and they want a consultant to do it,” he says. “It will be a big part of our future.”
He concedes there are other types of clients that it won’t suit, but that the key is to developing and delivering capabilities for both.
The implemented consulting, that was only formed about a year ago, is fully customised to the liabilities of the individual plans, with a judgement about the sponsors’ contribution ability feeding into the funded status, with a subsequent asset allocation model that best matches those liabilities.
While MacLean believes consulting businesses in the US will continue to merge, it will also stay fragmented.
“This will be good for clients as some of the best work is done by key individuals with ownership.”