SOURCE: Kennedy Consulting Research

Kennedy Consulting Research

January 14, 2010 16:33 ET

Benefits Consulting Provider Landscape: At a Crossroads

Kennedy Consulting Research & Advisory Explores How HR Consulting Firms Must Now Define Benefits Services

PETERBOROUGH, NH--(Marketwire - January 14, 2010) - New research on the Benefits consulting market reveals a dramatic deviation in consultancies' services alignment resulting from recent valuation declines in benefits plans. Among the drivers affecting firms' Benefits consulting services mix are organizations' needs for alternative approaches to funding their benefits plans; to understand the complexities of investment instruments; and to decide upon the right blend for optimum fund balance and risk.

Exacerbating companies' sense of urgency surrounding these issues is the fact that Defined Contribution (DC) plans, deemed the "silver bullet" for the shortcomings of Defined Benefits (DB) plans, are now coming under fire. "Economic instability has increased the recognition that DC plans likely do not have the capacity to provide ample income for millions of retirees," says Derek Smith, Director of Research, Kennedy Consulting Research & Advisory. "Progressive consulting firms are working hard to develop next generation DC plans that will better meet the retirement obligations of their clients' employees."

Other drivers of Benefits consulting demand include changes in DC plans that are forthcoming in many countries, including required regulation around automatic features of enrollment. Plan sponsors are globally centralizing DC plan operations for cost savings; however, Kennedy's research, "Benefits Consulting Marketplace," shows that European DC plans are one step ahead of the pure DC plans in the US.

As financial pension risk becomes more of a strategic issue, discussions surrounding related concerns now take place at higher levels within corporations -- CFOs, CEOs and boards of trustees. Effectively, many consultants have had little choice but to evolve as well, in an effort to better address these new clients. "Benefits Consulting Marketplace" indicates consultants ultimately have to decide which path they want to follow -- the one that leads to high-end strategic consulting, where organizations are willing to pay higher fees for their services, or that which ends with basic services, usually focused on cost-efficiency, and available at a much lower cost.

"Benefits Consulting Marketplace" scrutinizes the fragmentation of the Benefits consulting landscape, which includes services in Retirement/Pensions, Health and Welfare, and Investment. The research features exclusive capabilities ratings of 18 prominent consultancies serving the Benefits consulting marketplace. Kennedy analysts assessed the following practices on the current state of their service offerings as well as their momentum within the Benefits consulting market: Alexander Forbes Limited/Lane Clark & Peacock, Aon Consulting Worldwide, Buck Consultants, Deloitte, Ernst & Young, Gallagher Benefit Services, Hewitt Associates, Hymans Robertson, Mercer, Milliman, Morneau Sobeco, PricewaterhouseCoopers, Segal Group, Towers Perrin, and Watson Wyatt Worldwide. The six strongest practices are featured in "The Kennedy Vanguard of Benefits Consulting Practices."

About Kennedy Consulting Research & Advisory

Since 1970, Kennedy Consulting Research & Advisory, a division of Kennedy Information, has been the world's leading source of market analysis on the Management Consulting and IT Consulting industries, serving the most highly regarded professional services firms and Fortune 500 companies across the globe.

Kennedy provides accurate and reliable market sizing and forecasts for consulting services world-wide; needs analysis and vendor profiling for buyers of consulting services; timely and insightful intelligence on the top consulting firms in their respective markets; and operational benchmarks that measure consulting performance. Kennedy Consulting Research & Advisory's research spans multiple service areas, client vertical industries, and geographies.

Kennedy's stand-alone consulting advisory unit, Kennedy Information Advisors, provides results-oriented strategic guidance to buyers and sellers of consulting services.

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