Behavioural changes are needed across the chain of investment if investors are to retain long-term value, according to Mercer.
Advisers need to put investors' interests first by shifting their focus to long-term capital creation if they are to avoid potential leakages in the value chain, Mercer said.
"Investors are key stakeholders in capital markets and it is important for fiduciaries to have well-considered views and take active responsibility for advocating for change to benefit their ultimate investors," Mercer partner and global head of responsible investment Jane Ambachtsheer told InvestorDaily.
"There has been a lot of talk in the financial media about a fairer capitalism and this is a theme that is not going away.
"We're working on how we go from talk to action and we can work with investors to actually implement these concepts."
Mercer recommends asset owners measure the performance of asset managers on an annual basis rather than a quarterly basis and instead engage with invested companies within this annual cycle.
For asset managers, there is a need to adopt a longer term horizon and extend holding periods to reduce turnover costs.
Mercer has also suggested that companies change executive compensation to reward long-term value rather than just stock performance and to include an integrated reporting system based on this long-term view.
"These changes won't happen overnight, but they are important for our clients," Mercer senior partner and global director of consulting Divyesh Hindocha said.
"Making changes to the relationship between asset owners and asset managers is directly relevant to clients, and these will be made by shifting incentive and measurement approaches."
He added, however, that current market conditions may make implementing behaviour changes in the investment chain difficult.
"While these issues are always important, when everyone is doing well the return impact is less visible," Mr Hindocha said.
"A lower return environment makes leakages more visible, and hence provides more impetus to act to contain them".
