The Denver Business Journal is reporting via MSNBC.com: “SEC Targets Pension Consultants.” According to the article, the SEC sent out a mid-December letter to a number of pension fund consulting firms probing whether or not they were receiving payments from money managers that gave the managers preferential treatment in being recommended by the consulting firms to pension plans.
Quote of Note: “Don Trone, president of Sewickley, Pa.-based Foundation for Fiduciary Studies, confirmed pay-to-play can supply up to 25 percent of consulting firms’ revenue. Pay-to-play “is very widespread with the public pension market (30 percent to 60 percent), much less so with corporate retirement plans, foundation and endowments,” Trone said via e-mail. Trone stressed when consulting firms deny conducting pay-to-play activities, “they’re referring to explicit actions,” rather than implicit actions. He said the implicit schemes come in four types of “services” sold by consultants to money managers: Conferences with the consultant’s clients, performance measurement reports, performance measurement software, and training, marketing and sales consulting.”