AKA a better way to choose your advisers
Every few years or so, I need a bit of building work done on my house. I know I can’t do it myself so I call in an expert. I might be spending significant amounts and I have to live with the results, so I want to choose wisely. How do I go about doing this?
I’ll probably google what I want doing, find someone who looks professional and experienced, and has examples of doing similar work well (ideally with client testimonies that I can see or follow up). I’ll ask them to pop round, get their views on what I’m planning, see if they can suggest any improvements and ask them for a quote.
What I don’t do is send out a 100 question RfP asking them about their company history and their approach to plastering walls, score their answers, ask them to send through a PowerPoint presentation and interview them (I might meet the MD but not the guys who will actually be doing the work – they’d never be let near a client until they’ve signed up).
I’ll assume anyone I see can technically do the job – what I’m really looking for is evidence of how they can assess my requirements, deal there and then with my queries and suggest better ways of doing it. So long as the fees seem reasonable, they’ve got the job.
And yet…is my situation really that different to when Trustees are looking for new advisors?
OK, I accept my analogy is not perfect. As a Trustee I’m looking for someone for the long term, not a short term project. Perhaps a better analogy is finding a builder to go on a retainer for my portfolio of buy to let properties (I wish). So I do need to know we can work together and there is a good cultural fit and level of trust between us.
However, I do still have a real concern that the tried and tested approach is failing everyone, and that Trustees are not ending up with the best advisers for their situation. There are a number of reasons for saying this:
So what might an alternative approach entail? My suggestions include:
I honestly think this approach adds no more time for Trustees, and probably involves less time overall. I can tell you the bidders will be weeping with joy at being able to genuinely show what they can do for you. To be clear, there is still a role for independent advisers to help identify candidates, check the hygiene factors of the firms involved and sit in on the discussion if required – in fact, that may keep the presenters “honest”. And you will probably get more out of their involvement as a result.
Builders and actuaries – we’re just the same really!