Filed Under:Life Insurance, Life Planning Strategies

Cerulli: Fewer than One in Five Investment Consultants Satisfied with Teams

Photo credit: Ambro
Photo credit: Ambro

Fewer than one in five investment consultants are very satisfied with their consultant relations teams, according to a new report.

Cerulli Associates, Boston, published this finding in a summary of results from a new survey, "Cerulli Special Quantitative Update: Institutional Markets 2011." The report is an analysis of U.S. institutional markets, including public and private defined contribution and defined benefit plan endowments and foundations, insurance general accounts, and sub-advisory accounts.

The report's product coverage encompasses CITs, hedge funds, and ETFs. The report is based on 5 proprietary surveys, 25 secondary sources and 24 executive interviews.

The report finds that just 18.2% of investment consultants are "very satisfied" with their consultant relations teams. This contrasts with 45.5% who are "somewhat satisfied," 27.3% who are "neutral" and 9.1% who are "somewhat dissatisfied."

The report adds that timely communication for material changes to investment personnel/process (91.7%), risk management capabilities (84%), and consistent performance without style drift (81.8%) ranked as the top three deliverables that investment consultants look for from the asset managers they employ. This makes sense, the report adds, given that two of these deliverables are most likely to impact future investment performance. 

John Hsu, senior analyst in Cerulli's institutional practice, notes that recent merger and acquisitions (M&A) activity among investment consulting firms has expanded the global reach for the acquirers, while also deepening expertise within specific institutional markets. He adds that consolidation among investment consultants is resulting in increasing influence for these firms.

As their numbers shrink, the Cerulli report finds, fewer firms are gatekeeping a larger portion of assets.  As a result, asset managers should be motivated to focus heavily on their current support and service structures for these firms.

"Strengthening these relationships will be critical to maintaining long-term access to institutional assets," says Hsu.


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Nichole Morford

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