chief investment officer print - are consultants losing the talent battle to asset managers
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9/10/2014 Chief Investment Officer - Print - Are Consultants Losing the Talent Battle to Asset Managers?
http://www.ai-cio.com/print.aspx?id=2147485930 1/3
September 18, 2013
Are Consultants Losing the TalentBattle to Asset Managers?Analysis has found that asset management firms, LGIM firstamong them, are the top destination for elite consultants.
(September 18, 2013) -- More senior level investment consultants in the UK arejoining asset managers than ever before, with Legal & General InvestmentManagement (LGIM) the top destination for new jobs.
aiCIO analysis of new starters at asset management firms and leavers frominvestment consultancies—which looked at more than 160 job changes—found67 high-ranking consultants have left their jobs for ones in asset managementsince 2010.
This figure is higher than the number of senior consultants who left their jobs forones in other consultancies, insurers, or other areas of financial services, whichtotalled 59 for the same period.
LGIM was the destination for 20.7% of the consultant leavers, placing itcomfortably at the top of the asset manager table. Schroders picked up a littlemore than 10% of consultant leavers, with UBS picking up another 8.6%.
The top poaching ground appears to be Towers Watson, with 27% of consultantswho moved into asset manager roles coming from that firm. Mercer was closebehind with 17% of the moves originating from it, and Aon Hewitt ranked thirdwith 9% of leavers.
The trend has been growing since before the onset of the financial crisis, but hasheightened in recent years, according to headhunters.
“The reason for asset managers hiring consultants is down to the way the marketis re-shaping,” said Paul Battye, chief executive of Moorlands Human Capital.
“The consultants are the guardians of pension funds and have traditionally goneto them with investment ideas and then helped them pick the best managers.Given the consulting firms are now trying to build their own asset managementbusinesses, it leaves the traditional asset managers needing to go direct tomarket as well as maintaining consultant relations.”
TC Jefferson, senior consultant at the Plenum Group, added: “Our assetmanagement clients have hired former consultants for their ability to ‘speak theclients’ language’, understand their liabilities and provide the quasi-advisoryservice required of a solutions provider.”
Poachers Become Poached?
It’s not all one-way traffic however—some asset managers are also making themove into consultancy. Using the same data, aiCIO found 33 asset managershad upped sticks for roles in investment consultancies since 2010.
9/10/2014 Chief Investment Officer - Print - Are Consultants Losing the Talent Battle to Asset Managers?
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These moves have been driven by the changing nature of investmentconsultancies. No longer seen as simple advisory houses, many are nowbecoming third-party asset managers too.
“Consultants who are looking to build their asset management businesses needoperational fund management skills,” said Moorland Human Capital’s Battye.
“It's the old adage that consultants consult but executives have to execute; this isan area of expertise consultants traditionally lack.”
Plenum Group’s Jefferson added: “Lately there has been an exchange of talentbetween the fiduciary management teams of asset managers and consultancyfirms, as one can occupy the same role in either type of organisation. As a resultof this evolving landscape, the movement of talent is very much a two-waystreet.”
The Rise of DC
One of the most striking developments of the last two years has been the rise ofthe defined contribution (DC) professional. Since 2011, eight consultants and twoasset managers have started working for the other side, thanks largely to theirexpertise in DC.
On the asset manager to consultancy side, Emma Douglas left Blackrock to joinMercer as UK Leader for Mercer’s workplace savings wrap in 2011, and RitaButler-Jones left Threadneedle as head of DC to take on a principal role atMercer in 2012.
The consultants who moved into asset management for their DC specialismsinclude Tim Horne, Nick Smith, Gary Smith, David Holding and Guarav Lal—allformerly of Towers Watson— who all moved to different asset managers in 2011.
And Nigel Aston, formerly the business development director at DC analystsPensionsDCisions, joined State Street Global Advisors as head of UK DC in2012.
Ian Addison-Smith, associate partner at Hanover Search Asset Management,said he expected the trend of DC specialists at investment consultancies beingpoached by asset managers to continue in future.
“They have proved to be a strong breeding ground for talent with Mercer, TowersWatson and Aon Hewitt specifically all experiencing junior and senior departuresin recent years,” he said.
“When it comes to DC, asset managers have been able to offer a role with equalbreadth, better remuneration, and a chance to move away from a billable hoursculture.”
The data used to create this article was collated from aiCIO’s existing recordsand job appointment notices from Plenum Group and Hanover Search AssetManagement.
The 2013 Knowledge Brokers—aiCIO’s list of the top 25 investment consultantsworldwide—can be found here.
Related Content: Top Mercer Consultant Jumps to Asset Manager and Should Boutique ConsultantsBe Grateful for Lehman Brothers?
Contact the writer of this story:Charlie ThomasAssistant European Editor, aiCIO
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