Languages can build bridges, languages can separate: A realization that can often also be gained in the field of asset management. Trade journals, specialist publications, and experts do not always speak the language that seems appropriate for the desired target group. Many foundations have investment needs, many foundations attend specialist events and seek to exchange ideas with industry experts. Private asset managers could be good advisors and product suppliers for many foundations – why do both parties sometimes have a hard time establishing a long-term partnership?
Communication level – interests and long-term character
As a rule, foundations and asset managers should primarily think long-term. The foundation because you want to fulfill the purpose of the foundation, the asset manager possibly because he pursues an entrepreneurial vision that is tied to his person or organization. Owner-managed companies do not usually think in quarters. However, the similarity of interests does not mean that the foundation tolerates all problems in the field of asset management. As in the field of consulting, the asset manager must fit the client (foundation). Especially with smaller foundations (assets from 0.5 million euros and upwards), investment in so-called asset management approaches in the form of mutual funds is often an option. Transparency about approaches and performance is given here and is a decision parameter besides the so-called soft factors. Product transparency in mutual funds is a good prerequisite for advisors, clients, and products to come together.
Possible “soft” criteria for asset manager selection
Many small to medium-sized foundations, in particular, are interested in personal, tailor-made advice. The core of the dissatisfaction with current advice can be, for example in the banking sector, that the fact of providing cost-effective or cost-neutral advice on setting up a foundation does not have to go hand in hand with the delivery of “inspiring” performance in asset management. It remains to be seen whether an investment advisor always makes the right choice of investment products. At the very least, it seems desirable that he is offered the right products that are suitable for fulfilling the purpose of the foundation. Direct feedback discussions with foundations suggest that there is also the potential for optimization in this area.
It takes time to find the right asset manager. Three simple questions to the asset manager through the foundation could be helpful during the initial interview:
a) Is he or she interested in managing “smaller” sums?
b) Does he listen, does he not immediately present a product?
c) Is he interested in the use of funds and projects of the foundation?
Interest, understanding, and added value for asset managers
The investment volumes of foundations represent a critical factor for the quality of advice. Asset managers as well as banks must think economically. Understandably, some providers often offer standard solutions. This does not have to ignore the needs of small and medium-sized foundations. What should not happen, however, is, for example, the constant “bombardment” of the investment decision-maker at the foundation with a large number of product proposals that may prove inappropriate in retrospect. Less is often more. Dealing with foundation goals, the subject of distributions, and perhaps also with topics such as attracting sponsors can make the dialogue with the foundation interesting for the asset manager. Some independents even offer the service of providing direct or indirect support for the acquisition of sponsors for foundation purposes – a real added value compared to pure product sales.
Information – Investment companies, associations, and “networks
Being courted by a large number of product suppliers at a foundation event can offer advantages – or only lead to a random result in the selection of the consultant. The first point of reference for identifying asset managers for “small” foundation assets can be investment companies such as Universal-Investment, IP Concept, or AmpegaGerling. A good overview of advisors can also be found at the Association of Independent Asset Manager Germany eV (Verband unabhängiger Vermögensverwalter Deutschland e.V.) – as well as among independent journalists, consultants, and many other market participants who are intensively seeking a professional dialog with asset managers. A non-sales-driven exchange of ideas often leads to interesting insights.
“Small” foundations have an interest in know-how and advice from independent asset managers. Perhaps in the long term, the above-mentioned will result in a kind of optimized decision-making process, so that it does not have to be said: “They were like royal children, they did not find each other”.