According to a Financial Times news report, consultant Blacket Research said the service would tell trustees if their consultant’s short-lists of managed funds were adding or destroying value.
The Edinburgh-based Blacket was set up in 2004 by Roger Brown, former head of equities at Scottish Provident. “Pension funds pay considerable fees for the advice they get from consultants – the question is, was there skill in that advice or did it subtract value,” Brown said.
The service evaluates short-lists and fund manager selection over a period of years. Pension funds pay for each short-list evaluated, with charges decreasing for multiple reports, according to the news report.
The ability of consultants to provide value for money also came under scrutiny in a report last week by Investit, a London-based consultant.
Meanwhile, Investit, a London consultant, found in interviews with 42 pension funds and their consultants that a third of trustees ignored the consultant’s advice when making the final choice of fund manager. One in ten manager selections were made without advice from a consultant and one in five fund managers on the initial long lists were not endorsed by consultants.