What do
you expect from your investment consultant? Most of time, an investment
consultant is hired because people think he does only three jobs: report on
performance, conduct occasional search and review managers. Do you think the
same? This is very short list. I must add few more things that a trustee should
expect from an investment consultant. Have a look!
Monitoring
the performance of managers- This goes beyond overseeing the
performance of managers. It also involves monitoring their strategies,
policies, and their implementations, organization changes. An investment
manager should inform the clients about all these matters.
Help put decisions on rational basis- Investment
decisions are complex and also involve many risks and uncertainties. Investment
consultant should be able to define clear alternatives, key factors and
potential consequences. No one can assure that all investment plans will work
out but making them in framework of clear decision analysis will surely
minimize the regrets if plans don’t work.
Accept
changes- Change in policies, strategies and asset allocation is
requirement of the financial investment management as the field is continuously
evolving. Consultant should take the responsibility of keeping the policies
current. For this, it is imperative for investment manager to stay up-to date
with developments and variations in the markets. Furthermore, consultant must
understand both asset allocation and liabilities. Investor must expect from his
consultant to involve in research groups to bring in actual procedures and
their implications.
Write account guidelines-
Account guidelines become obsolete with the rapid changes in markets. It is
preferable to have more and explicit guidelines. An investment management
professional is responsible for bringing guideline issues in the notice of
investor before any problem arises.
Monitoring the managers-An
investment manager is not only concerned with managing financial assets. He
must have broad vision. Many consultants report merely on bonds, shares and
stocks while some focuses on real estate, advising and investment. An
investment consultant must present full picture of opportunities for investors.
Conducting
search-Whatever searches are required, consultant should be able
to handle them all. Consultant must indulge in searches whenever required to
ensure careful investment management process. You should expect your consultant
to go into the depth of the issues and explore the new dimensions.
Team work-
Investment management is not confined to only one department. It is imperative
to expect your consultant to work in collaboration of other service providers
as well. This is about relationship of both temperament and familiarity with
other areas of professional competencies.
If your
investment consultant is not providing you with all these services then you
need to reconsider your manager.
