Worries remain over consultants and institutions

The issue of consultants who advise institutions on where to invest and whether they should receive fees from money managers has lingered long in the industry. More seem to be cognizant of the possible problems. According to a survey by Greenwich Associates, more than 20 percent of endowments with $500 million to $1 billion nixed a consulting firm due to conflicts in 2006, up from 12 percent the year before. At the same time, consulting fees have been going up. The average fee paid by endowments and pensions last year was $227,000 compared with $216,000 in 2005. It may be that the services are evolving into something more holistic. So the value of consultants is there. There just needs to be more disclosure. That could be a problem in terms of the revenue model.

For more:
- here's an article on ii.com