Upbeat assessment for asset consultants
Most asset consultants add enough value to justify the fees they charge, according to the latest research on the sector published by actuarial firm, Rice Walker.
However, the research suggests that investors need to look much more deeply and gain a better understanding of how each consultant is adding value.
Rice Walker director, Wayne Walker said implemented consultants marketed themselves on the basis of their investment processes, their ability to diversify risk, portfolio construction and their ability to select managers in each asset class that would perform above average.
However, he said the research suggested that investors needed to look much deeper.
“In some years, the major component of value added, or value subtracted, occurs from the implemented products finding themselves in underperforming asset classes simply because their investment structures remain tied to long-term strategic asset allocations,” Walker said.
He said that rather than relying on the relative performance of asset classes investors might be better served looking at manager selection.
“Good performance that reflects a consistent ability to add value through manager selection is much more likely to be repeated,” Walker said.
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