Wednesday, August 24, 2011

Know thy consultant...and yes, the earth did move

PAICR wrapped up today with the traditional conference closer: a panel of asset consultants and a question and answer session.

It was an intense session...made slightly more so as the earth, or at least the building literally moved, during the final part of the session.

There was no more powerful example of the permanency and ubiquitous nature of social media as immediately post-tremor ("Are we safe here?") everyone hit the iPhone or Blackberry to find out what happened.

At the time of writing I still don't know whether it was just a very big train, a minor earth tremor or a collective moment of shared excitement about what the consultants had to say to the audience of asset management marketers.

Here are some highlights of the discussion between the PAICR audience and consultants Cynthia Steer (Russell Investments) and Bryan Decker (Clearbrook).

Q: So what of the (almost dreaded white paper)?
Maybe it's dead suggests one senior consultant. Give me, instead, they ask, short briefs. And your view on the implications of market movements - not more commentary on the movement itself. In other words, the condensed and value-added version, of your thought leadership.
Even better, be in the news. You need, says one consultant, to be in the FT. We want to see you, in these uncharted times, in the dialogue between the economists and the fund managers. There may not be a real pathway in this market but the conversation is important.

Q: What do you use manager websites for?
Not as much as we should, came the answer. Webcasts...and some other stuff. In uncertain times make sure your webcasts can deal with a higher number of attendees.

Q: What's your expectation on timing eg the US downgrade?
Bond managers better be fast with their guidance...even if it's not perfect. Same day is good. Two weeks later is probably useless. We don't mind if you get it a bit wrong, according to one panelist. But if it's cogent and clear, get it out regardless.

Q: What sort of communication works?
Update your PowerPoint book every six months in fast changing times. Show us how you've evolved your thinking.

Q: To what extent do the numbers tell a story?
If the qualitative data (team, organization structure, alignment) doesn't 'jive' the data won't get you there alone say the consultants. In other words, we've heard it all before: every new manager has a great track record. But, as just one example, how's the fit (or chemistry) between the fund and the CEO? And what's the full story behind, for example, the revolving door of new hires? Tell us the truth, not the spin. We've heard all manner of BS, so we're listening for the dissonant chord when something in the story doesn't quite match the rest. So don't bother with the glossy version...we'll take warts and all over that any day.

Q: How technical is too technical?
Well some new consultants might need the dumbed down version but if your consultant audience grew up in the swaps and derivatives market then show them the trades.

Q: Ever hired someone on simulated performance?
No. There's nothing like the taste of real money. Good and bad. As a consultant I remember that I'm there for the guy who may never earn more than 70k a year for life. Or an endowment that needs the money to fund their work.

Q: What should we do as we approach capacity?
For the first time we're at capacity constraints in a number of areas says one consultant. Yes, it's a real issue. And yes, we're open to you starting a new strategy. But give us the down and dirty version - the good reasons why it makes sense and why you think it will work. Because we've seen it go wrong plenty of times.
It's an interesting exercise in firm integrity. How you handle it is key. Particularly given we have our notes from the last ten years we've been meeting with you and hearing about your philosophy and what you've been saying about how you're going to manage money...and how much of it.
There's some beauty in staying exactly where you are today.

Q: If you're a manager with only two or three strategies how do you approach asset consultants?
Know exactly how your offer fits their need. Do your due diligence. Emphasize the advantages of being small. With capacity constraints in the market today you may well have an edge. But know who you are marketing to.

This is the final post from BlueChip Communication at the PAICR conference in New York on 22 and 23 August.

No comments:

Post a Comment

Thanks for reading. Constructive and relevant comments welcome!