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Client Service and Asset RetentionBenchmarking Survey
Project Description and How to Access
2
Background
Working in partnership with Pensions & Investments, in December 2009 and January 2010, Eager, Davis & Holmes (EDH) conducted a benchmarking study on client service practices and standards in the U.S. institutional investment management industry. This benchmarking study represents a continuation of research EDH has periodically conducted on client service practices in the institutional asset management industry since the late 1980s.
The study is designed to help investment management organizations more effectively evaluate and compare:
• Use and effectiveness of various asset retention practices and activities
• How client service is organized
• Client service communication practices, resource levels and productivity
• Trends in client service – particularly in light of the 2008/2009 credit crisis
3
Method
Participants completed a questionnaire focusing on:
• Client servicing organizational approach• Client service staffing levels and productivity • Client communication practices• Activities directed toward improving asset retention
To ensure accuracy, each manager’s submitted data was reviewed by our staff to identify outliers and inconsistencies. Incorrect data was adjusted or eliminated. Questionnaire responses were then entered into our Benchmarks Database for this analysis.
Questionnaire information from each firm remains strictly confidential and is used only for the purpose of developing universe information.
All data shown in this report is for the period ended September 30, 2009, unless otherwise noted.
44
Sample Characteristics
In total, 56 institutional investment managers participated in this study. Participating managers were required to have at least $2B in institutional assets under management.
Following is a summary description of the 56 participants:
Participants in aggregate had over $2 Trillion in institutional assets under management as of September 30, 2009
Participants in aggregate had over 20,000 institutional clients as of September 20, 2009
Participants’ assets under management were distributed across numerous client types; including Defined Benefit, Defined Contribution, Endowment/Foundation, and Subadvisory
On average, 78% of participants’ institutional assets were invested in either active equity products (41%) and/or active fixed income products (37%)
5
Three Levels of Consulting GuidanceYour firm has three options for accessing EDH’s 2010 Client Service Benchmarks research and using it to strengthen your firm’s client service program:
Level: Description:
1. 2010 Client Service and Asset Retention Benchmarks Report
Data Version
This report presents tabulated results of EDH’s most recent industry benchmarking study on client service:
• Free to study participants• $750 for non-participants
2. 2010 Client Service and Asset Retention Benchmarks Report
Analysis and Conclusions Version
A more detailed report that includes EDH’s assessment and conclusions of practices that lead to better client retention:
• $750 for study participants• $1,950 for non-participants
3. Client Service Program Strategic Evaluation Completing over 130 client service-oriented projects for investment managers combined with our ongoing client service benchmarks research makes EDH a thought-leader on client service best practices. We know client service practices that lead to strong client relationships that weather the ups and downs of the performance cycle.
In a Client Service Program Strategic Evaluation, EDH evaluates your firm against industry best practices in client service. You are provided with detailed recommendations for improving and/or building-out your client service program.
Please contact us to discuss how we can help strengthen your client retention and cross-selling success:
Dave Eager 502 657 6477 deager@eagerdavisholmes.comGlenn Davis 502 657 6478 gdavis@eagerdavisholmes.comDavid Holmes 502 657 6479 dholmes@eagerdavisholmes.com
Survey Questions
6
H
elping investment m
anagers win and retain assets
9900 Corporate C
ampus D
rive, Suite 3000 . Louisville, KY
40223 P: (502) 657-6477, 657-6478, 657-6479 . F: (502) 657-6326 . eagerdavisholm
es.com
C
lient Service and Asset R
etention B
enchmarking Survey
Decem
ber 2009
• Participating investm
ent managers receive a com
prehensive report that helps you com
pare your firm’s client service resources and activities to those of other
institutional investment m
anagers. •
Your answ
ers will be kept strictly confidential. O
nly aggregated data will be
shared. •
Estim
ated time required for com
pletion: 20 to 30 minutes assum
ing you have the required inform
ation at hand. •
Please provide the following inform
ation so that we can contact you to clarify
answers if needed:
Firm N
ame:
Contact N
ame:
Telephone N
umber:
E-m
ail:
• Please return your com
pleted questionnaire by Decem
ber 16. Send via fax to 502 526 4275 or em
ail to dholmes@
eagerdavisholmes.com
We suggest you save a
copy of this questionnaire to facilitate comparison to aggregated survey results.
For questions, contact:
David H
olmes
Phone: +1 (502) 657 6479 E
-mail: dholm
es@eagerdavisholm
es.com
Instructions
Please provide answ
ers specific to activities in North A
merica.
The study focus is servicing institutional clients. W
ords defined below appear in
italics in the questionnaire text.
Please answ
er any time-sensitive questions (staffing levels, assets under m
anagement,
etc.) as of September 30, 2009.
Definitions [D
efined terms appear in italics throughout the survey]
Institutional Clients. M
ay include retirement plans, charitable organizations,
endowm
ents, foundations, corporate balance sheet assets, insurance company assets,
bank assets, separately managed accounts, and subadvisory assets. This study specifically
excludes high net worth (w
ealthy individuals) and retail assets.
Institutional Client Service. Includes all direct com
munication, reporting and service for
the institutional fund sponsor or client. Excludes ancillary services such as DC
participant services/com
munications, D
B actuarial services/paym
ents, back office administration,
etc.
Primary C
ontact. Individuals in your organization who have prim
ary first line responsibility for understanding and m
eeting the needs of clients specifically assigned to them
. Depending on your servicing m
odel, the primary contact m
ay be a relationship m
anager, portfolio manager or sales person.
Product Specialists. Individuals who serve as a liaison betw
een the investment group and
prospects/clients/consultants for a specific product or product group.
Professional Staff. Senior level positions responsible for client managem
ent, m
anagement of a servicing function, or having responsibilities that require advanced
training and experience.
Relationship M
anager. Individuals primarily responsible for client account m
anagement
(conducting/ attending review m
eetings, providing updates, responding to client needs). Som
e firms do not have individuals in this function because their sales persons or
portfolio managers perform
this role.
Sales persons. Individuals primarily responsible for direct selling to prospects,
consultants, and/or clients. They may have servicing responsibility for the accounts they
win.
Support Staff. Positions performing clerical, adm
inistrative or secretarial duties.
Background Inform
ation 1. Please provide the follow
ing information pertaining to N
orth Am
erican client servicing business activities as of Septem
ber 30, 2009, or using the most recently
available data (indicate date below). N
ote: Please ensure the time fram
e in which you
answer the questions is consistent throughout the survey.
Num
ber of Institutional Clients
Institutional A
ssets Under M
anagement
(Million $)
If data not as of 9/30/2009, indicate date (xx/xx/xxxx)
2. Approxim
ately what percentage of your institutional client assets fall in each of the
following categories?
% R
etirement assets: defined benefit
% R
etirement assets: defined contribution
%
Endowm
ent/Foundation
% Subadvisory
% Insurance com
pany (general account) assets
%
Other : W
hat? 100%
3. A
pproximately w
hat percentage of your institutional client assets fall in the following
categories?
% A
ctive equity %
Active fixed incom
e %
Indexed or enhanced index products %
Hedge funds
% Private equity
% M
ulti-asset mandates (target date funds, broad m
andates) %
Other
100%
4. Approxim
ately what percentage of your total new
assets gained for the year ending 9/30/2009 (or other date indicated in Q
uestion 1) came from
existing clients (including both cash flow
and cross sales)? %
5. Approxim
ately what percentage of your institutional clients use only one of your
firm’s products? Tw
o products? Three? Four or more?
O
ne
%
Tw
o
%
Three
%
Four or more
%
Total
100 %
6. Do you have client service goals (e.g. asset retention, cross sales) that are stated in
writing and w
idely understood throughout your organization?
Yes
N
o
7. Do you have a client service strategy or plan that is stated in w
riting and widely
understood throughout your organization?
Yes
N
o
Servicing Structure/R
esources
8. How
many em
ployees have job responsibilities that are primarily dedicated to
institutional client service, including both professional and support staff?
Professional Staff
Support Staff
Total
9. To what degree has your client service staff count changed over the past tw
o years? [C
HO
OSE O
NE]
Up 20%
or more
Up 5 to 20%
W
ithin 5% of tw
o years ago D
own 5%
to 20%
Dow
n 20% or m
ore
10. Which type of individual m
ost often serves as your clients’ primary contact, that is,
the person responsible for understanding and meeting each client’s needs? [C
HO
OSE
ON
E] Relationship M
anager Sales person Portfolio M
anager Product Specialist O
ther
11. [If your firm uses relationship m
anagers as the primary contact] W
hat percentage of your relationship m
anagers hold a CFA
? [CH
OO
SE ON
E]
Below
25%
26%
to 50%
51%
to 75%
76%
to 100%
12. [If your firm uses relationship m
anagers as the primary contact] Specific to your
relationship managers, w
hat is their average years of experience in the institutional investm
ent industry? [CH
OO
SE ON
E]
2 years or less
3 to 5 years
6 to 10 years
More than 10 years
13. [If your firm
uses relationship managers as the prim
ary contact] Which of the
following factors are used to evaluate your relationship m
anagers’ job perform
ance and influence their compensation and/or incentive bonuses?
[CH
OO
SE ALL TH
AT A
PPLY]
Firm
profitability
C
ross sales
C
lient or asset retention
C
lient-based revenue
C
lient satisfaction measures
Other specific service objectives
Subjective evaluation
O
ther
14. To whom
does your head client service officer report? [CH
OO
SE ON
E]
Reports to:
Head of Sales and Service
Head of M
arketing and Service H
ead of Marketing, Sales, and Service
Chief O
perating Officer
Chief Investm
ent Officer
Chief Executive O
fficer O
ther W
hat?
15. Does your firm
use product specialists that play a role in client servicing? N
o Y
es
16. Please answer the follow
ing questions regarding the individuals who serve as
primary contacts to your clients:
a) What is the approxim
ate average number of clients assigned to each individual
(his or her account load)? b) W
hat is the approximate average num
ber of face-to-face servicing calls made by
typical primary contact person at your firm
in a one-year period for each purpose listed below
? Form
al review m
eetings Inform
al meetings
Entertainment/social
Hosting visits to your firm
O
ther Total
Client Inform
ation Managem
ent/Com
munication
17. Please list the client relationship managem
ent (CR
M) system
(s) you use. [LIST ON
E IN
EAC
H A
NSW
ER FIELD
AS N
EEDED
] a) b) c) d)
18. Rate your satisfaction w
ith each software/system
listed above using a scale where “5”
is “very satisfied” and “1” is “very dissatisfied.” [ASSIG
N R
ATIN
G TO
EAC
H O
NE
USED
; AN
SWER
“18a)” CO
RR
ESPON
DS TO
THE SY
STEM N
AM
ED IN
“17a), ETC
.] a) b) c) d)
19. Do you “tier” or “segm
ent” your client service, i.e., intentionally define and provide higher or low
er levels of service, contact, or comm
unication to certain segments?
No
Yes
(If yes) How
many tiers/different service levels do you have?
(If yes) On w
hich characteristic(s) do you tier? [CH
OO
SE ALL TH
AT
APPLY
]
A
ccount size/revenue
Fund size (client’s total assets)
Total revenue potential
C
lient needs, expectations, or levels of sophistication
C
lient satisfaction level/clients at risk
Fund type (corporate, public, etc.)
Location
C
onsulting firm used
Other
What?
20. For each applicable asset class, please tell us how quickly (in num
ber of working
days) after the “close day” you provide your monthly and quarterly reporting
package to your “typical” clients.
Num
ber of Working D
ays after Closing D
ate M
onthly Reporting Q
uarterly Reporting
• D
omestic Equity
•
Fixed Income
•
Int/Global Equity
• A
lternative Investments
21. Approxim
ately what percentage of your institutional client base, if any, receives
customized (non-standard) reporting? %
22. Which of the follow
ing are you currently providing to institutional clients via “hard-copy” delivery? V
ia Email? V
ia your Web site? [C
HO
OSE A
LL THA
T APPLY
]
Hard C
opy? Em
ail? Website?
Perform
ance reports
Performance attribution
Asset/transaction statem
ents
Investment/econom
ic outlook
A
sset allocation advice
O
rganizational developments
RFPs
Investment education/w
hite papers
A
udio presentations
Video presentations
Other
None of the above
If you answ
ered “other,” what?
23. Which of the follow
ing other methods of client com
munication does your
organization use on a regular basis? [CH
OO
SE ALL TH
AT A
PPLY.]
Client conferences
Web casts/W
ebinars C
lient round tables or issue-focused discussions C
lient educational group meetings
Hosting visits to your offices
Audio conferences
Video conferences
24. A
pproximately w
hat percentage of your institutional clients have seen the following
individuals in a formal or inform
al meeting over the past year?
Portfolio Manager %
C
hief Investment O
fficer %
Chief Executive O
fficer %
25. Does your firm
require the primary contact for each account to develop a specific
written account strategy or plan for each client? N
o Y
es
25a. If yes, is each account strategy/plan periodically reviewed by a higher level
staff mem
ber, such as the head of client service or head of sales and servicing? [C
HO
OSE O
NE]
No, none is periodically review
ed Selected account strategies/plans are review
ed Y
es, all are periodically reviewed
25b. If yes, how often are they review
ed? [CH
OO
SE ON
E] M
onthly Q
uarterly A
nnually Less often than annually They aren’t review
ed
Asset R
etention Activities
26. Please estimate the percent of your institutional clients having appropriate
performance expectations for your products that they invest in. [C
HO
OSE O
NE]
B
elow 25%
26% to 50%
51% to 75%
76%
to 100%
27. Focusing only on accounts your firm
has lost due to performance reasons:
Measuring from
the point in time w
hen the client first voiced concern about perform
ance, approximately how
much longer w
ere you typically able to keep the client before you w
ere terminated? [C
HO
OSE O
NE]
Less than six months
Six months to one year
One to 1.5 years
1.6 to 2 years M
ore than 2 years
28. Which of the follow
ing asset retention activities: a.
Does your firm
currently engage in? b. D
o you find effective in asset retention? [CH
OO
SE ALL TH
AT A
PPLY IN
EA
CH
CO
LUM
N]
a) Use? b) E
ffective?
Providing higher service levels to clients “at risk,” (dissatisfied clients)
C
ross selling toward clients at risk
Increasing visits to clients at risk by senior investment personnel
Visits to clients at risk by C
EO
Developing and im
plementing account-specific strategies/plans
Promoting client contact w
ith others at your firm beyond the
relationship m
anager
D
eveloping relationships with other contacts at the client organization
Ensuring clear and repeated com
munication of your investm
ent
approach and perform
ance expectations
Providing advice on investm
ent topics beyond your specific role
Hosting non-w
ork related events
Third party client servicing audits/assessments of best practice
Periodic training for client servicing personnel
Accessing client satisfaction survey data that is gathered for a large
number of investm
ent managers in one survey
Conducting a client satisfaction study exclusively for your firm
that is adm
inistered by an objective third party
C
onducting a client satisfaction survey administered by your internal
staff
Lost client interview
s
29. Com
pared to two years ago, please indicate w
hether the following aspects of
institutional client service have decreased, increased or not changed significantly. [C
HO
OSE O
NE FO
R EA
CH
ASPEC
T] No N
o
Decreased C
hange Increased Opinion
Account loads
R
eliance on technology
“Face tim
e” with clients
Your firm
’s focus on cross selling
C
lients’ openness to cross selling
Y
our senior managem
ent’s involvement in service
Your investm
ent staff’s involvement in service
Consultant’s involvem
ent in service to your clients
Im
portance of providing solutions for clients
Importance of developing relationships w
ith clients
30. W
ho at your firm takes the lead in com
municating w
ith field consultants who are
serving your clients? [CH
OO
SE ON
E]
Our consultant relations team
Our client service/relationship m
anagement team
Other:
Thank you for com
pleting this survey. Your responses w
ill be kept strictly confidential and used only in com
bination with responses of other organizations to identify com
mon
practices and trends. 31. M
ay we include your firm
’s name w
ithin the report as a study participant? Y
es N
o
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