Adam Berk

Adam Berk is a principal in Ernst & Young LLP’s people consulting practice, bringing more than 30 years of experience in retirement and investment consulting. He serves as the EY Americas retirement service leader and has conducted numerous financial management studies for funds with assets up to $400 billion.

Adam earned a bachelor of arts degree with honors in mathematics from the University of Texas. He is an associate of the Society of Actuaries, an enrolled actuary and a chartered financial analyst. Additionally, he serves on the advisory committee to the dean of sciences at the University of Texas at Austin.

CIO: What do you think will be the biggest innovation in the institutional asset allocation industry in the next 10 years?

BERK: We believe that investment organizations that adapt their current thinking to incorporate artificial intelligence will gain a significant edge. By leveraging AI’s capabilities to analyze vast datasets and uncover valuable insights, asset allocation strategies and decisionmaking processes will be significantly enhanced. However, it is crucial to strike the right balance between machine-driven insights and the essential human element in fiduciary decisionmaking.

As the integration of AI continues to evolve, it will enable investment teams to optimize risk assessment and facilitate quicker portfolio adjustments in response to market fluctuations. Furthermore, integration across the business remains critical, particularly within the chief financial officer function. This shift will lead to more efficient and adaptive investment strategies, enhance marketability by demonstrating a commitment to innovation and improved outcomes, and help minimize headline and litigation risks.

While AI innovations will undoubtedly enhance institutional investment opportunities, they will not replace the need for skilled professionals. The most successful teams will be those that attract top talent with proven track records, effectively combining human expertise with advanced technology to support fiduciary responsibilities. By doing so, they can better evaluate preferences and assess the potential impact of these innovations on performance, fees and risk management.

CIO: What actionable thing have you learned over the course of your career that has proven itself this year?

BERK: A key lesson I have learned is that change is constant, and the significance of customization in delivering retirement plan solutions cannot be overstated. Organizations must reflect on what has worked in the past and what will be effective in the future. This year, we have witnessed increased technological innovation (e.g., AI), litigation (e.g., pension annuity transfers) and significant organizational restructurings. The importance of customization in retirement plan solutions has been reaffirmed; there is no one-size-fits-all solution. Each corporate retirement program consists of unique participant demographics, financial literacy levels, compensation structures, governance models, regulatory considerations and stakeholder risk tolerance. What works for one organization may not yield the same results for another. Managing retirement programs can be challenging without the right resources. We have collaborated with plan sponsors adapting to changes, whether due to shifts in participant behavior, leadership transitions or evolving legislation. It is crucial to provide tailored solutions that address their specific challenges and needs. In this rapidly changing environment, no one wants to be left behind; plan sponsors and investors must continuously question and adapt their strategies.

CIO: How has institutional consulting changed in the last five years, and what do you expect to change over the coming five years?

BERK: Institutional consulting has undergone a notable transformation, evolving from a primarily investment-focused role to a comprehensive consulting resource that encompasses corporate strategy. This shift has been driven by factors such as the emergence of AI and ongoing market changes. Looking ahead, we anticipate further evolution in this role, adapting to legislative changes and emerging trends. A prime example of this transformation comes from a recent client engagement. The client initially engaged a low-cost outsourced chief investment officer provider focused on de-risking, which limited their ability to develop greater surplus. While this strategy had merit, leadership’s perspective shifted toward exploring surplus benefits and gaining more control over investments. Our engagement involved evaluating the advantages of surplus, the client’s risk profile and the need for greater investment control, given the relationship between program investments and the company’s market cap. Although emerging trends favored OCIO providers, our independent evaluation revealed that this approach did not align with the client’s evolving needs, prompting them to in-source their investment function with support from investment providers under an advisory arrangement. This example illustrates our commitment as independent trusted advisers, emphasizing customized solutions rather than following prevailing trends.