The recent bear market and the pressure it has placed on funding levels to meet pensions obligations has resulted in some market-leading consultants developing new approaches to investment problems. Hewitt Bacon & Woodrow is championing the notion of unconstrained benchmarks and Watson Wyatt is proposing segregation of assets into risk-minimising versus growth-maximising categories.

In response, active managers might be considering a leap onto this bandwagon (see Nick Ferguson's comment, "The cult of indexation has had its day", July 14 edition of Financial News). The danger is that poorly performing active managers could be let off the hook and attempt to hide behind the work of thoughtful consultants. Unconstrained risk is the last thing investors need.