Facing a variety of pressures from fee compression and talent wars to growing demand for more complex services, investment consulting firms have to evolve their thinking from the way business has "always been done" to stay afloat, officials say.
One of the biggest challenges facing the investment consulting industry is the ongoing "war of talent" with the asset management industry, warned Bryan Ward, senior partner and head of solutions and sales at Aon Investments USA.
"We are doing a good job in recruiting and attracting entry-level workers and keeping them," he said. "But once they reach their midcareer point — say after 10 to 20 years — they sometimes go to asset management firms," primarily chasing higher compensation.
But compensation isn't the only factor at play here, Ward said, suggesting job satisfaction and the feeling of accomplishment from providing comprehensive services are also crucial elements in keeping workers.
As the consulting industry and investing in general become more complex, retaining valuable staff will be very important for the industry's future, Ward added.
But given the current tight job market, it is getting harder for some consulting firms to recruit new talent.
"We have tried to remedy this by in-house training and education," said Seth Almaliah, senior vice president at Segal Marco Advisors. "We would like to have a workforce that is multiskilled given how the markets have become so complex and will continue to change and evolve."
Stephen P. McCourt, managing principal and co-CEO at Meketa Investment Group, acknowledged another big pressure on the industry: the demand for ever-increasing services combined with ever-increasing fee competitiveness.
"Given this, consulting firms must find ways to deliver more for less over time, through reinvestment in their businesses," he said.
But John Delaney, senior director and portfolio manager in investments at Willis Towers Watson, believes a lot of the challenges the consulting industry faces are largely what makes the space interesting to be a part of.
"There is the ongoing challenge of continuing to ensure offerings are well-suited to the needs of the client base, and providing efficient delivery mechanisms for delivering those offerings are items we challenge ourselves on daily," he said. "We believe the challenge to innovate and evolve as the market evolves is one of our strengths as a business."