EUROPE - The Dutch fiduciary management model for running pension assets is set to grow - with banks and consultants increasingly in competition, says Watson Wyatt.

"This is a model that has been popular in the Dutch market, for instance," says the firm's global head of investment consulting, Roger Urwin.

"It looks set to grow, with banks and the mainstream consulting firms in competition for roles."

Urwin made the remarks in a commentary piece in the Financial Times where he examines the outlook for the consultant-client model - what he terms the "greying of the consultant space".

He notes the "controversial issue is how that model is changing in relation to the form advice should take and who should provide it".

The technical nature of consultants' work such as asset allocation and manager selection has deepened considerably, Urwin argues.

And there is increased demand for consultants "to add value in explicit ways and be fully accountable for their performance".

But he contends that the more consulting firms offer a manager of managers or fund of funds approach the "more this resembles fund management, the more the advice loses independence".

Other players are entering this marketplace. Notably, there are the fund of hedge fund firms - their skills include consulting and intermediation, but their offering is clearly a fund manager product. From another quarter one sees the investment banks active as advisers. Their most common service relates to LDI and the use of structured products to improve the risk reward trade-off. .

He concludes: "Consulting looks like it will undergo some of the biggest changes of any of the participants in pension fund management. There is no question that a thriving consulting sector is critical for funds to strengthen their governance.

"More competition in consulting from adjacent organisations brings more choice and must be healthy. Success will belong to the firms that think ahead and serve institutional funds with good listening skills, alignment of interests and investment talent."

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