April 22, 2025 — The spike in volatility in global financial markets will make 2025 an interesting year in the normally placid world of institutional investment consulting.  

Relationships between institutional asset owners and investment consultants are generally stable and long-lasting. Asset owners rely on consultants mainly for help in selecting asset managers and monitoring portfolio performance. Due to the long-term and strategic nature of these tasks, asset owners tend to stick with the same investment consultants for extended periods of time.  

In the U.S., most asset owners review their investment consultant only every three years or more. In Canada, nearly 40% of asset owners will only hold reviews when specific events trigger a need.

However, in both markets there is one thing that consistently triggers a swift review of consultant relationships: poor investment performance. Approximately three-quarters of the Canadian asset owners participating in a recent study from Crisil Coalition Greenwich say sub-par investment performance triggers an investment consultant review. In the U.S., that share is 60%. 

“Market volatility creates divergence in asset manager performance, which in turn has the potential to create divergence in the manager slates assembled by investment consultants,” says Mark Buckley, Global Head of Investment Management at Crisil Coalition Greenwich. “With greater opportunity for both out-performance and under-performance relative to the benchmark, periods of volatility can interrupt the relative stability of the investment consulting industry by putting relationships into play.”   

North American Institutional Investors Study
Crisil Coalition Greenwich interviewed U.S. and Canadian institutional investors as part of its most recent annual North American Institutional Investors Study. The research covers major reasons for hiring and not hiring consultants, attributes institutional investors look for in consultants, search methodologies used in hiring a consultant, effectiveness measurement techniques, and relationship review policies.