the value and duties of an asset consultant
TRANSCRIPT
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the value and duties of an
asset consultant
Rob MacMahon\Martin Poole
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agenda
~ PF130
~ what is an asset consultant?
~ what services do they offer?
~ when to use an asset consultant
~ will funds pay extra?
~ how do EB consultants work together
with an asset consultant?
~ assessing asset consultants
~ discussion
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PF130
~ best governance structures
~ stakeholders need to understand their
role and the when to use expert
advisors
~ board orientation and education
~ risk management and internal
controls
~ investment performance and
communications
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definitions
1. asset consultant
2. investment strategy document
3. fiduciary duty
4. quantitative manager analysis
5. qualitative manager analysis
6. implemented consulting
7. co-fiduciary
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what is an asset consultant?
~ investment experts
~ by your side
~ analyse fund membership
~ help trustees & EB consultants
discuss and make investment
decisions
~ work with other providers where
necessary e.g. communications
content and strategy
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understanding our roles
to achieve your fund goals reliably over time
- no conflict of interest, one common goal
objectives &
goals
fund structure
develop &
implement
investment
strategy
member records
board of
management/
trustees
benefit
consultants
administration
asset
consultant
actuary
asset
manager
specialist asset
class
investment
statutory role,
valuations,
strategy approval
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services asset consultants offer
investment
manager review &
recommendation
investment
governance
investment governance
workshop
compliance with PF130
investment strategy
review &
development
analysis & investment
strategy development
workshop
investment philosophy
workshop
analysis & manager
workshop
asset manager
quantitative &
qualitative analysis
implementation of
investment strategy
member
knowledge &
understanding
member education
communication
trustee knowledge &
understandingtrustee seminars
trustee training
implemented
consulting
end-to-end advice &
implementation
value added services
fiduciary duty & investments: good governance
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when to use an asset consultant...
at any stage in the process
setting investment objectives
developing investment strategy
selecting asset managers
implementing and monitoring
reporting to members & trustees
review
governance
framework
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when to call an asset consultant
~ new fund
~ any large change to
membership/corporate action
~ review of membership and
investment strategy development
~ review of asset managers
~ trustee training for investments
~ investment communications strategy
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will funds pay extra?
~ access to investment funds at good
cost is critical
~ best governance structures are not
without cost
~ asset consultants can use their
influence when implementing
~ total cost (relative to risk) to member key
~ more appropriate funds
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benefits / obligations
~ fiduciary liability
~ compliance with PF130
~ governance adds 1-2%p.a. in performance
~ long term benefit for members~ appropriate investment funds
~ long term education programmes
~ members’ faith in trustees
~ peace of mind
~ the fund is receiving advice!
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asset consultants: how are they paid
~ for just advice / single service~ agreed rand based fee per service
~ monthly retainer or % of assets
~ for implemented solution~ % assets or retainer
~ could be recovered from asset manager
~ general guideline: convenience and value
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assessing asset consultants
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working together
~ understanding areas of expertise
~ collaboration for our clients best
interests
~ independence and transparency
~ long term working relationships
~ effective communications
~ consulting opportunities
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discussion
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poor decisions
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worrying times
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legal case 1
~ administrators, Estate Richards vs.
Nichol & another
~ the trustees of a retirement fund must
seek advice on matters on which they
are not expert
~ apply their minds to all the information
at their disposal
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legal case 2
~ Jowell vs. Bramwell-Jones & Others
1998
~ if trustees do not have the knowledge or
skill for investment decisions they must
secure expert advice
~ the adviser then becomes liable