New research from Cerulli Associates finds that more than 60% of institutions' asset flows were consultant-intermediated in 2012 with the rest coming from direct sales, according to their recent survey of institutional asset managers.
"Given the significance of investment consultants, just over half of the asset managers we polled plan on placing an even greater emphasis on fostering consultant relationships," states Michele Giuditta, associate director at Cerulli. "This percentage initially appeared low to us, but our discussions with institutional distribution leaders confirmed that many firms are already devoting substantial resources to these efforts and plan on continuing to do so. This explains the high percentage of firms that plan on dedicating the same level of emphasis on the consultant relations effort in the future."
In the fourth quarter issue of The Cerulli Edge - Institutional Edition, Cerulli analyzes distribution trends, including the changing consultant landscape and growth of outsourced chief investment officers, retirement distribution dynamics, and passive investing.
"Capital markets have become increasingly more complex, and the investment opportunity set has broadened to include more complicated investment products and vehicles," Giuditta continues. "Given institutions' growing needs, they seek more support and advice for their portfolios, which has led to an increase in the use of investment consultants."
Cerulli reports that many investment committees are redefining their roles, delegating more of the day-to-day investment-related responsibilities to their gatekeepers, and focusing more on overall policy matters.
"Consultant relations professionals shoulder significant responsibility as investment consultants request more from their asset managers," Giuditta explains.