TACOMA, Wash. - Globalization has helped Frank Russell Co. attain a significant milestone - retainer advisory business from institutional clients and retirement plans representing more than $1 trillion.
That figure - approximately equivalent to the gross domestic product of the United Kingdom or Italy - represents assets of pension funds, endowments, foundations and other financial institutions throughout the world it advises. Russell has about 200 clients; the average client has $5.5 billion in assets.
Although 40% of Russell's consulting clients are based in North America, nearly one-third are in the Asia-Pacific region. The firm advises six of the 10 largest Japanese pension plans. Russell's international clients also include the Ontario Pension Board in Canada and the Civil Aviation Authority in the United Kingdom.
"There are two aspects as to why we see it as important to being global," explained Gloria Reeg, managing director at Russell. "It's important to be global in order to provide complete research and advice on any individual's investor domestic program."
"So even if our domestic client isn't a global company, our exposure to the global market lets us provide better insights on their investments," she said.
Callan Associates, San Francisco, is another consultant looking to expand beyond U.S. borders. "The consulting business in the United States is a mature industry, and for large firms like ours it's important to expand our client base," explained Gordon Dickinson, senior vice president. "As well, many of our clients are multinational firms and have been expressing a growing interest in expanding globally."
Callan has retainer advisory relationships with institutional clients representing more than $300 billion.
No matter what the size of the firm, remaining relevant to clients in the age of information is a challenge for all consultants.
"The proliferation of sources of information has definitely had an impact on our industry," Ms. Reeg said.
"As a result, if you just focus on delivering information, you won't remain relevant. To stay relevant, you have to help a client turn that information into a quality process or investment returns. With the tighter expense controls that clients are operating under globally, you have to add value or they won't have the relationship with you. Today, we see clients' expectations as one of our major forms of competition."
Said Callan's Mr. Dickinson: "It's truer now than ever - we're in the business of trying to sort through a tremendous amount of data and turn it into tools that our clients can use to make meaningful decisions. Being able to deliver data electronically and in a way that people can utilize it is a bigger part of our job today."
