Some say that any three-way relationship is doomed to failure and that pension fund investment is no exception. This cannot be the case, but it is not difficult to understand why many observers are critical and cynical about an industry which seems to have lost its sense of purpose and direction.

The relationship between trustees, investment managers and investment consultants should be straightforward. The buck stops with the trustees, but they have insufficient time, expertise or resources to invest the pension fund assets themselves, so they appoint one or more investment managers. However, how many managers come clean about their weaknesses without a good deal of kicking and screaming? If one accepts that there are good and bad managers, then someone needs to research them and help the trustees to select a manager. Enter the consultant.