Magazine article American Banker

SEI to Shed Some Consulting; Conflict Issue Cited

Magazine article American Banker

SEI to Shed Some Consulting; Conflict Issue Cited

Article excerpt

SEI Corp. is planning to sell off some of its investment consulting services in an effort to concentrate on its core businesses of asset management and bank trust and technology services.

The Wayne, Pa.-based company, which offers investment services to banks and other financial services companies, will shed its pension and investment management consulting business. And it will farm out its retirement-plan record keeping to KPMG Peat Marwick, New York.

SEI officials said the move was hastened by concerns, voiced by retirement plan sponsors and some banks, that the company's effort to sell its proprietary mutual fund complex undermined its impartiality as a consultant.

"This is absolutely a strategic decision," said Cris Brookmyer, vice president and controller for SEI. "We've tried to find an answer to the perceived conflict of interest between our consulting business and our asset management."

SEI's consulting services include, among other things, rating and choosing mutual funds for investment portfolio managers or pension and 401(k) plan sponsors.

"They were trying to hold themselves out as an impartial evaluator of mutual fund services, but at the same time they were selling their own mutual funds as well," said Richard A. Davies, managing director of First Chicago Investment Management Co. "It put them in a position of not seeming credible."

Ms. Brookmyer said shedding the ancillary business will let SEI "devote more management attention to the areas we are best at. …

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