Thu, May 5, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

New report on pension consultants shows increases in conflicts of interests

Tuesday, January 15, 2013

Bailey McCann, Opalesque New York: Due Diligence Review Corp. has released its annual review of pension investment consultants, showing that many of them are taking on dual roles and charting new territory in order to serve and find clients. Most pensions use multiple paid consultants which perform various roles from developing policy to advising on allocations. According to the report, most pension investment consultants raise few red flags in a due diligence review, however, those that do, tend to provide services to some of the biggest funds.

The report found five pension consulting firms that also act as broker dealers. A broker-dealer is a person, company or other organization that trades securities for its own account or on behalf of its customers. Broker-dealers are typically paid on commission and as a result, are not impartial to the products that end up in their client portfolio. The authors of the report note that when broker-dealers are also pension investment consultants, the same impartiality can bleed into their consulting activities.

"It’s difficult to understand how a consultant acting as a broker-dealer can provide objective, independent advice to pension fund clients. Indeed, decades of experience tell us it’s a rare broker-dealer that does so," authors write. They note that broker-dealers typically have a preference for a greater number of transactions in order to gain ever greater commissions - a practice that may not be well suited to long t......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Hedge funds see $14.3bn outflows in Q1, CTAs and multi-strategy lead net inflows[more]

    Komfie Manalo, Opalesque Asia: The hedge fund industry saw net outflows of investor capital in the first quarter of the year, totaling $14.3bn, data from Preqin showed. This continues from the $8.9bn overall net outflows that funds recorded in Q4

  2. Third Point calls Q1 "catastrophic" for hedge funds[more]

    Bailey McCann, Opalesque New York: The first quarter of this year was rocky for hedge funds based on aggregate performance from the industry, but now we are beginning to hear what the managers thought of it as quarterly letters make their way to investors. Dan Loeb, CEO of New York-based $17 bill

  3. Asia - Stabilization of China's capital outflows may hinge on Janet Yellen, Fink says China to do well this year as bubble threat postponed, Chinese hedge fund to invest in India’s infrastructure[more]

    Stabilization of China's capital outflows may hinge on Janet Yellen From Bloomberg.com: Whether China’s recent stabilization of its currency and capital outflows continues -- or downside pressure reignites -- may hinge in large part on Janet Yellen. If the Federal Reserve chair sticks to

  4. …And Finally - After all, judges are human too[more]

    From Newsoftheweird.com: In March, one District of Columbia government administrative law judge was charged with misdemeanor assault on another. Judge Sharon Goodie said she wanted to give Judge Joan Davenport some files, but Davenport, in her office, would not answer the door. Goodie said once the

  5. Comment - Unmasking the men behind Zero Hedge, Wall Street's renegade blog[more]

    From Bloomberg.com: Colin Lokey, also known as "Tyler Durden," is breaking the first rule of Fight Club: You do not talk about Fight Club. He’s also breaking the second rule of Fight Club. (See the first rule.) After more than a year writing for the financial website Zero Hedge under the n