A recent survey from consulting firm Aon Hewitt suggests that pension funds looking to hire consultants or outsource investment management duties will overwhelmingly consider firms they’ve already worked with over those they haven’t.
This survey comes from Britain—but it’s a safe bet that funds in the U.S. behave similarly.
Reported by Financial News:
Pension funds that are contemplating bringing in a fiduciary manager – a single firm to take on most, if not all, active investment responsibilities – are overwhelmingly more likely to employ a firm they already know rather than a newcomer, a survey for consultancy Aon Hewitt suggests.
Only 12% of 125 funds said they would bring in a firm they did not already employ.
In choosing among firms that already worked for them, 59% would go for their consultant and 30% for a fund manager.
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Sion Cole, head of client solutions at Aon Hewitt, who is responsible for its £6.2 billion fiduciary business, said: “Fiduciary management has to be built on a level of trust. What we’re seeing is that pension trustees are going out to market, assessing their options and then appointing someone they know and trust to do that job.”