Operational Efficiency
Mercer Sentinel is an industry leader consulting on custody, middle office, investment operations and transaction-based activities

Mercer Sentinel is a dedicated specialist team within Mercer Investments focused on advising clients on the non-investment risks associated with investment operations and execution. The team focuses on very specific areas of non-investment and service provider risk and is comprised of professionals who have deep backgrounds and experience in custody, investment operations and execution, and risk management. Mercer Sentinel is a recognised industry leader with respect to consulting on custody, middle office, investment operations and transaction-based activities, including execution quality, operational risk management, and governance. Our approach provides a combination of extensive practical and operational experience, a deep resource base, proprietary database of industry best practices as well as analytical tools. Our team consists of more than 50 professionals located in North America, Europe, and Asia Pacific.

Mercer Sentinel Services


Our experience shows that firms of all shapes and sizes continue to face basic business risks and increasing regulatory demands.  Investors and investment managers need to be cognizant of operational risks in order to effectively manage them and meet their regulatory duties.

Operational risk consulting: Investment manager operational due diligence and investment manager operational infrastructure optimization.

Custody consulting: Custodian selection, fee and capabilities benchmarking and asset safety reviews.

Transaction/execution cost and efficiency consulting: Investment manager transitions support and transition manager selection.

We help our clients reduce risk and costs as well as potentially improve returns through better control and management of the activities associated with holding, trading, and servicing investment portfolios.

Our Services


Foreign Exchange 

Mercer has been providing FX transaction cost monitoring for clients for over a number of years and have observed consistently strong performance once a monitoring process is established.

Mercer has also negotiated substantial cost recoveries on individual transactions where unreasonable rates have been applied. In a recent study for a large multinational insurance firm, we identified opportunities for netting, trade consolidation and facilitated the negotiation of a competitive fixed spread regime saving over €1m.

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Custody Consulting

A custodian can be an invaluable partner in prudently managing, administering and overseeing institutional investments. Additionally, safe and sound investment administration and internal controls are cornerstones for virtually every investment arrangement. We have one of the most comprehensive evaluation processes in the industry, combining our proprietary best practice benchmarking with onsite research and due diligence. Our process is thorough and transparent, ensuring objective and consistent comparative evaluations and monitoring. We help clients with a wide range of custody-related projects, from selecting new custodians to structuring new investment administration arrangements (for example, unbundled defined contribution plan operations) to simply assessing value for money.

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Operational Risk Assessment 

Mercer assesses investment managers’ operations and implementation risk profiles. In conducting this analysis, our primary focus is to distinguish well-managed operations and control environments from those that potentially expose clients to increased and often unnecessary risks and costs.

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Transition Consulting

Transitions represent potentially significant risks and material costs. Regardless of how simple they seem, each transition presents unique challenges and complexities; therefore, oversight requires considerable experience and knowledge. Mercer Sentinel has market-leading solutions to assist and advise clients on all transition aspects. We focus on identifying, analysing and controlling risks and costs. Using our extensive global experience with trading, transition controls and capital market operations, we help clients address potential issues and complications prior to moving assets. We have developed unique and sophisticated methodologies to promote transparent cost and risk discovery.

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Monitoring  

Most institutional investors are likely to monitor and understand gross returns. To achieve optimal returns, they should also focus on the following three objectives: Investment efficiency, Operational risks, and Value for money.  

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Securities Lending

Mercer has extensive experience consulting to institutional investors on all aspects of securities lending programs.

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Custody Consulting

A custodian can be an invaluable partner in prudently managing, administering and overseeing your investments. We help clients with a wide range of custody-related projects, from selecting new custodians, custodian governance through capabilities review, performance monitoring and asset safety reviews to simply assessing value for money through fee benchmarking reviews. We apply a comprehensive evaluation process, combining our proprietary best practice benchmarking with onsite research and due diligence.

We also have extensive experience advising on all aspects of securities lending programs.  We advise on program structures, evaluating and selecting lenders, assessing and benchmarking ongoing securities lending operations and controls. In addition to providing a thorough assessment of a lending provider’s capabilities, its internal control structure and collateral management, we also assess the reasonableness and competitiveness of lending revenue estimates.

Foreign Exchange and Equity Transaction Cost Analysis (TCA) Mercer Sentinel performs FX and equity TCA reviews that help clients understand whether their execution costs are appropriate and competitive relative to their size and other offerings in the marketplace.

Based on our analytical techniques and operational insights, clients have been able to both reduce costs and negotiate fee reductions to directly benefit their portfolios.

Transition Consulting

Undertaking transitions can incur significant risks and material costs. Regardless of how simple they seem, each transition presents unique challenges and complexities. This demands oversight, and oversight demands considerable experience and knowledge. Mercer Sentinel has market-leading solutions to assist and advise clients on all transition aspects: identifying, analyzing and controlling risks and costs. Using our extensive global experience with trading, transition controls and capital market operations, we help clients address potential issues and complications prior to moving assets. Our unique and sophisticated methodologies promote transparent cost and risk discovery.

We maintain close contact with all Transition Managers in the market and can assist with selection of a provider where required.

Mercer Advantage


Dedicated specialists focused solely on governance, service provider, investment operations and execution risk

  • We are not generalists. Investment operations and execution risks are our sole focus.
  • We assess the structure and controls surrounding investment operations and transactions, asset administration and key service provider relationships.

Expert team with highly specialized backgrounds

  • Our approach is to provide our clients with access to individuals with extensive professional experience in custody, operations, transitions, risk management and investment administration. 

Extensive knowledge of industry best practices

  • Our team has vast experience globally. We conduct hundreds of projects annually, and have covered over $2 trillion in invested assets over the past 15 years. This provides us with a keen insight into industry best practices.

Global reach

  • As a global team (50+), we use our local knowledge to benefit clients who invest internationally.

Resource on Demand

  • Operations, service provider, and execution risk evaluation can be very time consuming and an expensive use of resources. At Mercer we  can provide experienced personnel on demand.
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Operational Risk

MERCER SENTINEL

AN INVESTMENT INDUSTRY LEADER IN OPERATIONAL RISK

Speak With a Mercer Consultant

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