FUND BOUTIQUES: Myths About Sales, “To Answer Nature’s Call”, Institutional Investors, Intelligence & Trust
(GUEST CONTRIBUTION – Jürgen Büschges, JB Convest)
In analogy to an old saying by Waldemar Dyhrenfurth, a 19th-century German lawyer and writer: “A merchant is reluctant to accept crap instead of cash,” the relationship between investment sales and asset management units often has a striking resemblance.
My former boss, Professor Dr. Penzkofer, profoundly shaped my understanding of the buyer-seller dynamic with the following statement: “If you no longer believe me, I won’t bother lying to you.” A pointed remark on the importance of honest communication.
Another statement that stuck with me: “Wash my fur, but don’t get me wet.” This summarizes many investment committee meetings I’ve experienced. Often, these situations result from unrealistic expectations between providers and clients regarding the purchased product. This phenomenon is not limited to finance—it also applies to fields such as healthcare, where personal responsibility is becoming increasingly important. In recent years, especially in home-use medical technology, significant advancements have been made in the world of investment product sales.
In addition to base salaries (ranging from none to generous), the motivation in sales is also driven by commissions, which are ultimately paid by the investor. This applies to both the product creators and the distributors. This part of the “deal” should be disclosed more transparently.
A crucial question is: What exactly is the value proposition the investor can expect? And what kind of value is the decision-maker on the investor side looking for?
One could argue that the answer depends on the type of investment products and the investor’s specific needs. That is certainly true. A potential “hygiene factor” in this relationship could be the realistic probability of the promised product features materializing. This element is defined by both the ethical standards and the capabilities of the product creators.
On the institutional investor side, significant analytical expertise has developed over recent years to assess investment products both qualitatively and quantitatively. Sometimes, consultants act as intermediaries between distributors and investors. Overall, artificial intelligence is increasingly enhancing the quantitative assessment of investment products, provided sufficient data points are available.
So, where can human intelligence still add value in the analysis process? Primarily in the area of trust. From many conversations with investors and distributors, I’ve learned that authenticity, equating to honesty, ranks highest in terms of value. In sales, this often means introducing products through people regarded as credible individuals who have demonstrated integrity and independence over many years. On the client side, it involves long-standing relationships built on mutual understanding and a shared sense of values.
Such relationships cannot be built overnight. They evolve through conversations that go beyond products and polished presentation environments.
I would even differentiate between the so-called “American way of sales”—where salespeople often earn significantly more than their clients and control larger budgets—and family-run wealth structures, where the opposite is often true. In these cases, the investor (the “merchant”) sets the tone and defines the type of relationship he or she wants. A relationship at an eye level, in my view, is essential for creating the often-invoked “win-win situation.” Which brings us full circle to Bonifazius Kiesewetter, the pen name of Waldemar Dyhrenfurth.
About the Author: Jürgen Büschges is a seasoned finance expert with over three decades of experience in institutional asset management. In addition to holding various senior leadership roles, he was a founding board member of GET Capital AG. He now focuses on innovative approaches in asset and health management through his work at JB Convest.
Foto: Jürgen Büschges
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