Individuals invest to achieve long-term goals such as college education and retirement. Organizations, companies, universities and pension funds also invest money to attain long-term goals. Their goals vary depending on the group. Objectives might entail pension planning for employees and growing endowment funds that should exist for decades to come. Organizations with a lot of money to invest need professional assistance. Investment consulting firms help large entities manage their money.
Definition of Investment Consulting Firms
Investment consulting firms advise individuals and organisations on what to do with their money. Most of these companies work almost exclusively with institutional organisations. These include pension funds, universities, corporations and non-profit organisations. Some firms also work with high-net-worth individuals and their families. The job of these consultants is to figure how to allocate and invest large sums of money in order to meet specific goals. Consultants analyse investment goals and attempt to understand the organisation's objectives, performance expectations and acceptable amount of risk.
The Two Key Roles of Investment Consultants
The investment consultant first determines how to allocate resources so that funds exist and are accessible when needed. The allocation usually involves a variety of assets, including equities, bonds, cash equivalents, real estate, mutual funds, hedge funds, private or partnership business investments and other alternative investments. The second focus is deciding where to invest the money. The firm researches investment managers and specific funds, and allocates dollars to various managers. Once the allocation and investment phase are completed, the firm monitors performance.
The Top 10
The top 10 investment consulting firms based on assets under advisement in 2010 were the following: Hewitt EnnisKnupp; Mercer Investment Consulting; Russell Investments; Towers Watson Investment Services; Cambridge Associates LLC; R. V. Kuhns & Associates; Callan Associates; Pension Consulting Alliance; Strategic Investment Solutions; and Wilshire Associates.
About the Top Companies
Hewitt was bought in 2010 by Aon Corporation, an insurance and consulting firm based in Chicago, Illinois. The firm is now known as Aon Hewitt. Mercer has global operations representing 3,700 clients and assets under advisement of over £2.3 trillion. Russell Investments is a diversified company servicing institutional clients as well as offering mutual funds to individual investors. Russell has £96 billion in assets under management. In addition to its 2,900 institutional clients, the firm has millions of individual mutual fund shareholders. Wilshire is another global firm with several business units. The company initiated the Wilshire 5000 index in the 1970s. Today, the firm boasts of serving more than 600 clients worldwide with assets over £3 trillion. The other firms are not diversified, concentrating their business on investment and related consulting opportunities.