Q. Mercer is known as a trusted advisor – what are investment solutions?
For 81 years, Mercer has been making a difference in people’s lives by understanding challenges and developing solutions for a wide range of clients.
We are, above all, a people business and in the latest period of economic uncertainty, we have been keeping in regular contact with our clients to ensure they have the help they need to manage any disruption and changes within their own organisations.
With investment solutions, we take the next step on this trusted advisor journey and by leveraging our scale, skills and expertise, we have created a complete governance framework.
We know that across our wide range of clients, protecting capital is key and over the last few turbulent months, we have seen this framework deliver value that reassures them just as much as the results they achieved in buoyant markets.
Our heritage in investment consulting has given us a deep knowledge of how to both shield investor portfolios and nimbly seek opportunities in a wide range of market conditions. Thanks to our large, global manager research capability, we can access a full spectrum of highly rated mangers1 – including alternatives and illiquid specialists – to implement them.
Investors who entrust the day-to-day supervision and adjustment of their portfolios to Mercer know their portfolios are being managed by experts who understand why markets are moving and will make every effort to either protect or benefit portfolios from future market moves.
Q. How do investment solutions add value to clients?
Our investment solutions platform is a framework through which our full range of institutional clients can invest with confidence. It helps them navigate uncertainty, capture opportunities in all market conditions and rest assured their portfolio is in expert hands.
But this is not a one-size-fits all solution. From partnering with us through a complete governance package to just selecting certain elements, our clients use only what they need from the investment solutions platform to keep their objectives in focus.
We work with our clients to set these specific objectives, allowing them to delegate as much of the design and implementation of their investments to us as they feel comfortable. Some clients want help on strategy design, others need asset allocation and manager selection support. We also have clients who just leverage our operational capability and due diligence platform to implement their own investment decisions.
Clients who want a higher level of investment support task us with dynamically managing their portfolios, meaning we can automatically adjust – always within their own tolerances – when we see opportunities or threats arising. Clients can be as “hands on” monitoring their portfolio as they like, while we also produce regular, standardised reports to keep them up to date.
By allowing our clients to select just the elements of investment solutions that they need, they have the confidence of being supported by Mercer, while staying in full control.
Q. How does Mercer support investment solutions operationally?
To support investment solutions, we have built an operational platform that streamlines processes and harnesses the power of Mercer’s considerable intellectual capital and research.
Hundreds of people and thousands of systems, tools and applications are constantly working to help keep clients on track to meet their own target objectives, no matter what happens in global markets.
For clients who delegate portfolio management to us, our investment strategists and asset allocation experts identify where they can add crucial value, drawing on our vast research capability to select who we believe to be the best manager to do it.
The trading operations embedded in our platform gives us the nimbleness to make a decision and execute it, seeking to ensure our clients’ portfolios are well-positioned to face future risks and to seize opportunities. However, we do not directly buy and sell assets and securities – we know that is not our core strength.
Additionally, instead of contracting with a range of managers individually, we aim to cut negotiation time, legal and transaction costs by clients signing one agreement with us. This means implementing an investment strategy through our platform typically takes around 24 hours and gets assets working quickly.
Through our platform, we closely monitor every client portfolio – from changes in funding level and shifts in asset allocation to currency and interest rate hedging – keeping in mind their specific regulatory requirements and investment philosophies.
We aim to give our clients confidence that their portfolio is in expert hands.
Q. Why are investment solutions from Mercer different to other investment providers?
Over the past 15 years, using this process and our world-class investment research team, we have built the largest investment solutions business by assets in the world, managing more than $305bn for more than 1,200 clients2. In 2019 and 2020, an independent survey3 confirmed that among our peers, we managed the most client assets.
But while we are the largest, it is not all about size – it’s about what we do with it, too.
At Mercer we work with a wide spectrum of clients – pension funds, insurers, endowments and foundations, wealth managers – and understand how varied their needs can be. We see the nuances within each sector and the discrete issues each of our clients face now and may confront in the future.
We partner with each client to create a specific framework, taking into account their long-term goals and shorter-term pressures. We know things can change quickly, so have drawn on our experience to build a framework that can flex over time.
Our platform also benefits from the vast investment strategy and manager research capability Mercer has amassed through advising investors for more than 70 years. By tapping into this huge knowledge bank, our Investment Solutions clients can harness the power of Mercer’s intellectual capital.
This significant heritage and authority in investment also permits us to press on fees from managers and other service providers.
Q. In a few words…
To sum up, our business is not based on selling products – instead we establish long-term relationships through which we can help meet our clients’ needs, keep them in control and keep their investments on track.
It is often in the most difficult situations that we see the value of close partnerships and the importance of strengthening them for the years ahead.
1 Highly rated by Mercer’s in-house global strategic research team.
2 Source: Mercer, 31 December 2019.
3 As defined in the “Chief Investment Officer” magazine’s 2019 Outsourced CIO Buyer’s Guide Survey, worldwide discretionary assets under management as of December 31, 2019 as reported by each firm to ai-CIO (http://www.ai-cio.com/2019-Outsourced-Chief-Investment-Officer-Survey/). AUM data as of 31 December 2019.
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