Marsh Unveils Post-Spitzer Business Model

With a new business model designed to maximize efficiency and transparency, brokerage giant Marsh & McLennan Cos. may have restored its client-base's confidence in the company, but those changes could come at the price of the company's vaunted revenue stream, observers noted.

Rolled out during the company's March 1 quarterly conference call, Marsh's new brokerage model calls for significant cost reductions -- including a reduction of 2,500 employees worldwide, which is on top of the 3,000 positions the company had already eliminated in the quarter -- a decentralized broking system, standardized rates for business, full disclosure of both services and fees, the spin-off of the company's MMC Capital unit, and, as previously noted, the complete elimination of market service revenue.

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