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The Actuary The magazine of the Institute & Faculty of Actuaries

Rewards and risks at Watson Wyatt

Watson Wyatt posted a 26% increase in gross profits to £60.2m (_85m) for the year to the end of April, thanks to its strong performance in the UK, where gross profits rose by 20% to £63m. The group managed to cut losses from its continental European businesses to £117,000 from over £5m in 2002. However, losses from Watson Wyatt’s US operation grew five-fold from £265,000 to £1.38m.

The total cost of remunerating staff rose by 12% to £18.2m as the group’s strong financial results led to higher performance-related bonuses. The average total pay for each of the 204 partners was £314,000, including bonuses and other benefits.

The annual accounts are the first to be published since Watson Wyatt became a limited liability partnership in April 2002. This will provide partners with a degree of financial protection in the event of any future legal claims against the firm.

Huge pension fund losses have raised fears that consultancy firms would face claims for giving out poor investment advice. Consultancies have been tightening legal contracts between themselves and clients in a bid to gain added protection against claims