Two big investment consulting firms have altered their strategies, reflecting a perceived shift in the needs of plan sponsors.
SEI Corp., Wayne, Pa., has restructured its business in an effort to better serve pension fund sponsors, while Frank Russell Co., Tacoma, Wash., has been making a marketing thrust on behalf of its performance measurement services.
Charles Marsh, SEI president, said SEI will drop its current regional structure and form national "teams" that are organized by the type of plan sponsor served. Within those teams, SEI will offer two businesses: asset advisory and asset management, Mr. Marsh said.
The team structure is being adopted so that SEI's employees, whether in client servicing or sales, will be more familiar with the specialized needs of their clients, he said.
Currently, there are just three national teams in place, but there will be more as SEI's "re-engineering" continues, and the teams are further subdivided, Mr. Marsh said. The three teams now are health care, multimarket and national. Multimarket contains a variety of plan sponsor type, and is where further division will take place, Mr. Marsh said. The national accounts team will serve sponsors where "internal resources are extensive," and fuller service consulting is less needed.
Most of the services from the asset advisory group will be provided through SEI's national accounts team, Mr. Marsh said. He said SEI's executives decided to formally divide asset advisory and asset management because they require "two totally different relationships" with clients.
SEI will continue to serve pension funds of all sizes, he said. "All the things that don't benefit the beneficiary need to be eliminated," he said. For example, there have been studies that show asset allocation adds a greater amount of incremental return than does portfolio management, he said.
Mr. Marsh said some of SEI's client relationships may be terminated. Those types of relationships generally involve SEI providing some type of commodity-like performance-related service, he said.
SEI employees are helping to design the system, which should ease the transition for them, he added.
"In this world, if you don't change, you're history," he said.
Meanwhile, Frank Russell started a push of its performance measurement services, said Craig Wainscott, manager-plan sponsor products for the Russell Data Services division of Frank Russell.
Russell is focusing on sponsors with greater internal pension resources, and, thereby, less need for full-service consulting, he said. Those types of sponsors need specific pension management services, and Russell is now pushing to provide them.
While Russell has offered these types of services for a while, it hasn't made a big effort to market them until recently. Mr. Wainscott said the change in strategy has been successful, adding more than 15 clients for various types of services over the last 18 months. New clients of the data services division include: Ameritech, Chicago; NYNEX Corp., New York; and the Virginia Retirement System, Richmond, Va.