The merger between JANA Implemented Consulting and MLC Implemented Consulting (MLC IC) is a reflection of the increasing complexity of the institutional asset management industry.

Combining the two businesses will allow the teams to leverage off each other's ideas and free up time to focus on their clients.

"When we weren't merged we were effectively competing with each other for business. We would both go for a tender," JANA executive director and head of investment solutions Jim Lamborn told Investor Weekly.

"Under that sort of environment, John [Coombe, JANA executive director] is doing Australian equity research and he sees Jon Armitage in the street who does equities for MLC; are they really able to swap and exchange views? Not perfectly.

"Now that competitive pressure is being removed and we are all part of the one business, John is able to talk to Jon Armitage on their view on managers.

"[The merger] is all about being able to go out with all guns blazing if you are to work on building client portfolios. These issues are just getting too complex.

"There are so many issues out there today - MySuper, the passive/active debate, after-tax, pre-tax - there are so many complications that we really felt that we would better serve clients' interests if we had the two teams able to share ideas across the forums."

It also had removed the need to compete internally for contracts, Lamborn said.

"We don't say this too loudly, but there is no doubt that Paul Ireland, who is heading up the MLC IC business, and myself both spent some of our time marketing internally our capabilities to [National Australia Bank asset management administration business] Plum. That is really a waste of time," he said.

"Now, there is one value proposition going forwards and Paul can focus exclusively on client needs."

He acknowledged mergers were often about cost savings, but in this case rationalisation had already occurred in the past, he said.

"The biggest cost in this process is the back-office investment control," he said.

"Both MLC and JANA have shared that infrastructure; it is all in North Sydney, about 65 people in investment control.

"It is one group looking after the daily unit pricing, the daily cash flows; all of that had already been merged years ago.

"A lot of people think 'oh, this was all about cutting costs', and usually it is, but this was about a book of business being brought into another book of business.

"There have been no redundancies from this process."

The merger would enable both teams to do more diverse research and it also complemented some of the existing capabilities, he said.

"For JANA, for instance, we didn't have a private equity capability," he said.

"Private equity in an implemented consulting environment is very difficult; it takes 10 years to build up a successful program and MLC has got that. It has a 10-year program across multiple sectors, across multiple vintage years.

"JANA has been very active in unlisted property; it has been a core part of our research for 25 years. MLC has probably not focused on that market segment.

"I think we now have the complete picture; no matter how you want to dice and slice the equation, we can deliver it."

An important driver of change in the asset consultancy industry is the increasingly larger size of multi-manager clients, in particular the superannuation funds, and this has resulted in funds taking some of the management back in-house.

Last week, Frontier Advisors chief executive Damian Moloney said in an interview with Investor Weekly that would likely cause clients to require more specialist services.

Partly this meant clients would use a panel of consultants rather than just one firm, but it would also drive demand for specialised research without consultant interaction to complement the in-house team's work.

Frontier plans to launch an online research database for these clients, which would enable them to access information on almost 1500 managers, including notes made by consultants during manager meetings.

Coombe acknowledged business models were changing, but he said JANA was unlikely to go down a similar path of providing access online.

"It will be interesting to see what information is actually on there; whether it is data about a manager, or whether it is actually Frontier's view. If it is their view, then that is a new ball game. [But] I'm not so certain I would want to go down that route," he said.

The problem with publishing recommendations online is not only that intellectual property is potentially being given away, but also that a manager will use this material to test its validity in court.

"I hope they have good lawyers, because if you put a negative view out on a manager and it gets back to the manager, are you opening yourself up [to litigation]?" Coombe said.

"It is different if you tell a client something in a meeting than when you put it in a publicly available document."

Lamborn also said it diminished the possibility of providing the context of a recommendation.

"I find that the really interesting conversations happen around a presented paper. It is the dialogue that you have around it," he said.

"JANA will have a strong view on a manager and say 'yes, it is absolutely essential for this portfolio, but we wouldn't dream of putting them in that portfolio over here'.

"It is not just about whether a manager is good or not; it is about whether this manager's skill set can work for this client."