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Service bugbears: six DFMs on fund manager failings

We ask six wealth managers to reveal some of the typical service mistakes fund firms make.

No matter how great performance is, if a fund manager does not deliver a top-class service it will struggle to win business from selectors. 

While fund groups often boast about the quality of the service they provide, clients still suffer certain bugbears. 

We find out from six wealth managers what the most common complaints are. 

 

 

 

 

 

 

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No matter how great performance is, if a fund manager does not deliver a top-class service it will struggle to win business from selectors. 

While fund groups often boast about the quality of the service they provide, clients still suffer certain bugbears. 

We find out from six wealth managers what the most common complaints are. 

 

 

 

 

 

 

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

James Johnsen

Church House Investment Management, London

‘At Church House, for reasons of risk management, cost and transparency, we fulfil client mandates largely using our own range of funds. We then build these out using third-party funds to provide exposure to the areas we don’t cover, this also adds an element of manager diversification.

‘We tend to use closed-ended funds rather than their more expensive open-ended cousins and have a small panel of managers who we know well, like and trust.

‘As fund managers ourselves, we well understand the issues involved and so avoid managers who don’t provide full transparency, who don’t own up to their inevitable mistakes or who don’t stick to their knitting. We prefer face-to-face meetings with the managers every now and then, rather than a blizzard of emailed fact sheets or sales rep calls.

‘We stick with managers who look after money like we do, in other words, as if it were their own. Short-term fads, benchmark “slavery” and performance fees are anathema.’ 

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Roy Clouse

Director, Cannacord Genuity Wealth Management, London

‘You get the good, the bad and the ugly in asset management, as you do with any profession. And where the bad asset managers are concerned, there are certain bugbears that spring to mind. Top of the list is the inability to relay the portfolio strategy in an in-depth professional manner – having all the details at hand and a rehearsed “elevator pitch” really helps.

‘Secondly, we sometimes find that the fund sales person hasn’t taken the time, or doesn’t have the financial knowledge, to understand the specific benefits or USP of the fund. Other “no nos” are not having up-to-date performance figures (you’d be surprised), not having up-to-date materials and not being aware of competitors’ performance or how their fund ranks in their sector.

‘Another turn off is when they tell me how I should be managing portfolios! Or when they follow up too aggressively. None of these attributes would encourage me to invest, as you can imagine…’

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Mohsin Bukhari

Head of investment research, Carrington Investments, London

‘I generally have a good relationship with the fund houses, but there is one major dislike and this involves the business development personnel.

‘There are two types of business development personalities: those who are genuinely interested in developing a long-term relationship and those who are just there to secure the transaction. I find the latter incredibly irritating and distasteful.

‘There are individuals who call without having done any prior work to find out more about our business model and investment process. There is no attempt to ask any questions so that they could offer something that may be better suited to our needs.

‘I believe the old styled approach of trying to sell a fund that is in vogue to as many people as possible, almost in a cold call manner, is no longer viable. The investment community has become more sophisticated than this.’

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David Bushe

Head of investments, WH Ireland International Wealth, Isle of Man

‘Most fund houses have made huge progress with regards to servicing their asset management clients’ needs [data and information] over recent years.

‘However for some, the quantity of information sometimes prevails over the relevance. This can really switch off an asset manager’s appetite to deal with the particular fund house.

‘If fund house A is an excellent Asian equity manager, they may not be the best US or European equity manager, and therefore must not assume that asset managers have the time or desire to read all the promotional or commentary pieces on every single fund they manage.

‘A more targeted approach utilises the fund house’s resources far better, while also giving the asset manager a higher quality and, therefore, more rewarding relationship.’

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Ryan Hughes

Head of active portfolios, AJ Bell, London 

'For me, the key to good service is fund manager access and information flow. While we of course want fund managers spending most of the time managing money, some groups make it very difficult to access the actual fund managers, instead trying to force you to see product specialists. While sometimes useful, this is no substitute for discussing the fund with the actual decision makers.

'Another area of frustration is with the speed of information flow. Too often, requests for data and information are held up, leading to delays in the time it takes for us to complete analysis or reporting to our clients.

'One final point of frustration is where the fund group are clearly trying to push a new or small fund. Sales managers telling us they have this great new manager we really must meet as they are going to be the next star is really not a way of capturing our attention!'

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Mike Deverell

Investment manager, Equilibrium Asset Management, Wilmslow 

'One of the worst things an asset manager can do is try to sell us inappropriate investments. We mainly invest in pretty plain vanilla funds and aren’t generally going to be interested in a Sub-Saharan Africa Small Cap Commodity fund, or whatever is the latest fad!

'We like to build close relationships with asset managers so they know what we will and won’t invest in. The best ones take the time to get to know us, understand our views on the world and where we’re looking to add to or amend our portfolio.

'Another key to getting us to invest is to be open and honest with us in good times and bad. Never try to pull the wool over our eyes when something hasn’t worked out. In return, we’ll be open and honest and if we’re considering selling your fund, we’ll give you the chance to persuade us otherwise.'

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