Companies urged to dump MLIM

PENSION fund consultants are urging companies to ditch Merrill Lynch Investment Managers in a potentially devastating development for the old firm of City 'ice maiden' Carol Galley.

Chris Erwin, investment principal at Aon Consulting, said: 'We and a number of other consultants have taken the view that the instability of staff there is such that all the clients who employ them as a fund manager should re-examine their decision. They have had a whole string of people departing - whatever you bought, you have not got it.'

Another consultant said it was advising clients to review their relationship with MLIM, but said the final decision whether to sack the firm was up to pension funds themselves.

The consultants, who advise company pension funds, are horrified at the high turnover of fund managers at MLIM. The final straw was the recent departure of Andreas Utermann, its head of global equities outside the US.

Pay levels are now likely to be increased to boost managers' morale. MLIM has been under increasing pressure since it was forced to settle a damaging court case with Unilever over alleged poor risk control.