The AMP Capital Institutional Investor Report surveyed global institutional investors to understand the driving forces behind asset allocation.
AMP Capital found 41 per cent took three to four months to change asset allocations and develop a strategy to implement the change, while 35 per cent said it takes six months.
“This is concerning as it implies that more than a third of schemes are not able to react quickly to market volatility,” AMP Capital chief executive international and head of global clients Anthony Fasso said.
“Investment decision makers at retirement plans recommend speeding up the decision-making process regarding asset allocation changes as well as making the process more independent from plans’ trustees and boards,” Mr Fasso said.
The survey found only 15 per cent of respondents said it took between one and two months to implement a strategy to change asset allocations.
AMP Capital pointed out that one respondent, the chief investment officer of a North American pension plan, said it is important for asset allocation teams to “shorten the implementation time” after they decide to shift asset allocations. Decisions about asset allocations made at staff level but approved at board level result in a "slow and inflexible" process, they said.
