Thanks, but No Thanks?

Many of you who know me or have read a number of my articles will know I like (apart from mentioning Manchester City in my (many) analogies) to have a rant or two about this wonderful profession of ours. I will let you into a secret here – not all the rants I have I actually believe in fully, I sometimes like to throw the odd bone and see who jumps on it – all in the name of active debate mind you. It’s good to look inward and challenge yourself and your views once in a while. It’s good then to put those views out into the wide world and see what becomes of said views.

But I’ll also let you into another secret – in this article I’m being serious.

Over the last couple of years, I have said a number of times that the profession has changed. Too much time seems to be spent on the “financial” aspect of “financial services” and too little time spent on the “services” side.

Now, don’t get me wrong, I’m not calling for a complete u-turn internal change to our compliance rulings with regards to gifts and hospitality (although some relaxation wouldn’t go unappreciated) and I broadly understand the reasons behind why the regulator clamped down as they did, but this piece is not about yearning for “the good old days” when an invite to a game of golf, or to watch a Grand Prix or being able to attend a conference and stay for the dinner. This piece is about “service.”

In a world where news flow is rapidly increasing, and many wire outlets are striving to scoop the exclusive, I’m not surprised that I get to read a great deal of news items from the media before I get to hear the news / read the news from the fund management group themselves. But, is this right?

Increasingly I’m not even getting ANY form of communication from the fund management company at all in relation to the “news” (some groups don’t even send me fact sheets as updates, so something of interest – a fund manager leaving / joining or personnel changes within the company, corporate action, new launches, fees being cut and so on is just obviously beyond reason.) A couple of recent examples have really cemented this to me, and as a precaution to writing this article, I sent an email to everyone in the team to ask if anyone had been in touch from the fund management businesses to see if it was “just me.”

I have been told in the past (on more than one occasion I might add) that I can be a grumpy bugger at times, and I can potentially forgive that as a reason for this lack of communication, but this has recently started to get to me. I am happy to admit that I do not spend a great deal of time at my desk, and regularly I don’t pick the phone up at the desk (and my desk phone doesn’t have an answer machine – decided by me – on purpose), but I haven’t turned off the answer machine on my mobile phone. Alternatively, I can be contacted via email, or even the good old-fashioned post. Back to the rant…. I read in the press that (very well known) Fund Manager A (from Investment Management Company B) was no longer going to be involved in the management of the fund that has been successfully managed by them for quite some time. Our business has tens of millions of pounds invested in the strategy. Surely that would have been worth a call? As previously mentioned, neither I, nor any of the team received a call, or any formal communication from the group in question.

I am aware that we have a lot of money invested on behalf of third-party businesses, in nominee names and on numerous investment platforms which could mean that certain Management Information might not make it back to the groups (am I making excuses for them?) but surely better to be safe than sorry.

From another angle, I have been known to talk with the press, and regularly get calls looking for soundbites and viewpoints from them. Once again, wouldn’t it make sense to let us know of the change of role of the fund manager, just in case we get asked for our views?

I was with the head of sales of Investment Management Company B about a month before the event, and I explained on a line by line basis how much money we have invested with the company and in which funds. It’s not as if they were in the dark about the fact that we have an exposure….

There have been a number of recent examples of managers leaving and not even a formal communication from the group along the lines of “xyz is leaving to pursue other opportunities, but don’t worry, we have abc taking over the role – keep calm and carry on.” There has also been the lack of indirect communication – we know of a situation where a manager has taken some time out for health reasons, but we know about through third party conversations and it hasn’t made the press; there has been a shift in pricing on a fund and so on.

I will agree that on the other side of the coin we sometimes have clients take money from us and we need to make redemptions. Some of those redemptions we are not necessarily in control of – we have models on platforms and when the platform receives the request for cash, they redeem without our knowledge. Of course, when we make changes to the models, flows come into certain groups and leave from certain groups. When these flows get quite large, we try our best to let groups know that they are likely to be receiving monies, or we are having to reduce our allocation to those funds. 

There are also times when I get a communication along the lines of “I see you have been selling down Asset D; is there something we should be aware of?” I will always respond to these emails – sometimes it is due to redemptions, sometimes due to asset allocation changes, other times due to us finding a better alternative, sometimes we’ve made an investment mistake, or a whole raft of other reasons. When I get this sort of correspondence it makes me think that maybe the Management Information systems are actually in good working order….

What I am increasingly not getting on the other side of the coin is “I have noticed some inflows, why is this?” and this is annoying me. – Note how I didn’t say the word “thank you” – increasingly we’re not even getting an acknowledgement from them for the business received. I’m not expecting a thank you for every deal, in many situations though we don’t get a thank you for ANY deal. In the last couple of years our business has grown dramatically. Collectively we manage over ￡1.8bn and can write some significant cheques / considerably assist when it comes to bonus time.

Many years ago, and I have been in the profession for a quarter of a century, I would regularly get a nod of thanks for business received. Maybe I would be taken out for a nice lunch (but the “financial” focus of “financial services” has seen an end to this) and a stronger relationship would have been formed between our two businesses. But, as margins get squeezed, so do those relationships. Nobody these days has an hour to chat about the profession, maybe over a cup of coffee, and discuss the industry issues, the good and bad of our respective businesses the challenges and opportunities. We are all busy people, but we shouldn’t forget what makes this profession work best – trust, relationships and the ability to converse.

It’s not all bad news though; some fund groups and individuals are very good when it comes to communication, but to save blushes I won’t name them either. They are remembered though, so thanks!

This note isn’t about me “not feeling the love,” its about the rapidly disappearing “service” aspect of our wonderful profession. Sure, I must shoulder some of the blame too – as I’ve said, there are times when I am too busy to pick up the phone to have a friendly chat, but I do feel the pendulum has swung too far, too fast. Maybe the issue is compliance, maybe it is driven by regulation, maybe it’s workload. Maybe as I get older and grumpier, I don’t want the relationships, but my wife says I spend more time at work than at home, so maybe it is something else.