What’s the role of an asset consultant post crisis?

Asset consultants have recently started offering medium-term asset allocation advice, often as a separately priced service.

Watson Wyatt Worldwide calls it “dynamic strategic asset allocation”. Russell Investments calls it “enhanced asset allocation”. Whatever the term, the advice sits between tactical asset allocation at the short end and strategic asset allocation at the long.

But by offering this service the asset consulting fraternity has raised the fundamental question as to what their role is compared with the role of fiduciary funds’ inhouse investment staff, compared with the role of fund investment committees and the role of the plan sponsor or trustee board.

If a fund wants to make medium-term bets away from its strategic ranges, who should make the decisions – specialist managers, consultants, fund staff, investment committees or boards?

Some consultants say they have been offering this advice for years – they just haven’t given it a name.

Sponsored Content

Some fiduciary funds question why consultants did not look to provide this advice prior to the crisis when valuations seemed stretched. Have they simply invented a new class of work for themselves?

Leave a Comment

Sort content by

CFA to lead industry out of crisis

Protecting the pension system is one of six key themes at the centre of the CFA Institute’s Future of Finance initiative as it aims to empower the investment industry to take leadership in restoring trust. Speaking at the sixty-sixth annual CFA Institute conference in Singapore this week, president and chief executive of the CFA Institute,

Tail risk parity, V 1.0

Just when you thought you were safe, the next reiteration of risk parity has arrived. AllianceBernstein’s tail risk parity takes the concept of risk parity, reallocating assets uniformly according to risk, but it uses tail risk, not volatility, as the core measure. The concept of risk parity is a portfolio diversified according to risk, rather

Retirement: a cause worth working on

There are two things that drive the newly appointed global chief operating officer of State Street Global Advisors, Greg Ehret, in his bid to improve the client experience: the retirement business is a cause worth working on and the clients are the reason the business exists. Ehret was appointed to the new position at SSgA,

Pension funds, where banks no longer go?

There continues to be potential for pension capital appearing where bank lending no longer wants to go. Commentators in the UK and continental Europe have heightened expectations that pension funds will step in to help fill the continent’s bank financing gap. Societe Generale, for instance, recently predicted further “disintermediation” by investors sidestepping banks and looking

Building consensus for investment beliefs at CalPERS

An investment-beliefs workshop for the CalPERS board, held in April, revealed five areas, including active management, where the views of the board and staff lacked consensus. The contentious, or unsettled, topics for discussion were active management, private asset classes, sustainability (environmental, social and governance), investment performance targets and stakeholder considerations. At the board workshop, Janine

Behind PGGM’s ESG index

In 2010 PGGM conducted a study to see if it was possible to reduce the number of companies it invested in from 4000 to 400, based on its environmental, social and governance leanings, and still maintain it’s beta risk/return profile. The idea was that the €133-billion ($174-billion) fund would better know and understand what it

Previous