Sun, Feb 7, 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. How Einhorn survived a nightmare year[more]

    From Bloomberg.com: Even when a hedge fund has an awful year, which was the case for David Einhorn's Greenlight Capital, there are lessons to be learned. Many funds would have had a tough time surviving a year like Einhorn experienced in 2015, when all the stars seemed to align against him and Green

  2. Legal - Hedge fund founder wins early release in U.S. insider trading case, Gramercy seeking $1.3 billion from Peru over land-bond dispute[more]

    Hedge fund founder wins early release in U.S. insider trading case From Reuters/Streetinsider.com: Former hedge fund manager Doug Whitman on Tuesday won a reprieve from serving the remainder of his two-year sentence for insider trading after several judges expressed skepticism that his 2

  3. Investing - David Einhorn finds a winner in Michael Kors[more]

    From Thestreetinsider.com: Greenlight Capital hedge fund manger David Einhorn took his lumps in 2015. The fund lost over 20 percent on the year amid bets gone bad being long a plunging SunEdison and short a couple high-flying FANG stocks. However, today Einhorn is again showing his stock picking pro

  4. Investing - Avenue Capital's Marc Lasry: We like European bank loans, Comment: A bunch of hedge fund managers are chasing the 'dream of crushing a major structural problem'[more]

    Avenue Capital's Marc Lasry: We like European bank loans From CNBC.com: European banks are under immense pressure, but at least one prominent hedge fund has found what it thinks is a good opportunity in the wreckage. Marc Lasry, co-founder and chief executive of hedge fund Avenue Capital

  5. Computer-driven hedge funds make money during January’s selloff[more]

    Komfie Manalo, Opalesque Asia: Commodity trading advisers (CTAs) that use computer programs to guide how they trade, made millions of dollars during last month’s market selloff on the back of declining oil prices and global equities and big moves in currencies. Data provider