Beauty parades – where shortlisted scheme investment managers are interviewed to see which one should receive a mandate – are a critical part of winning pension scheme business.
But what makes a good beauty parade performance from an asset manager? What are the key things asset managers should do – and avoid – to make sure they give the best impression on the day?
Professional Pensions asked its audience of trustees and scheme managers two questions on beauty parades – asking them what they thought was the single most irritating thing asset managers do (or fail to do) at beauty parades; and for one tip to help asset managers improve their performance.
In total, 128 scheme managers and trustees responded to the poll. This is what they said…
The most irritating thing asset managers do (or fail to do) at beauty parades
Many of the respondents commented on the poor quality of presentations – with too much jargon, overly simplistic pitches or a complete failure to understand the scheme they are pitching to being considered as some of the most irritating practices at beauty parades.
As one respondent commented: “Many presenters fail to understand their audience – a failure that means presentations can either end up being too dumbed down (so patronising) or, at the other extreme, be full of jargon or complicated maths and graphs, which are totally unnecessary and add nothing.”
Others found claims over performance were particularly annoying – and called on asset managers to be more honest in their presentations.
One respondent said: “All seem to present the picture that their past performance is great and, even when it isn’t, can paint the image that things have been done in house to ensure it all looks rosy moving forward. Why can’t they just be more honest?”
Failure to keep to time is also seen as key irritants by trustees as is the failure among some asset managers to focus on selling the product rather than listening to the trustees and answering their questions.
As one noted: “They can sometimes focus on their own standard agenda rather than engage with what we are asking.”
How asset managers can improve their performance at beauty parades
Being honest, knowing the client and audience and sticking to the brief given were the key top tips our audience of trustees and scheme managers gave to trustees.
As one respondent explained: “Research and understand the business and people you are about to meet. Don’t expect that because you are a well-known international provider you can just turn up, use a generic script with the blanks appropriately filled in (or not, in several cases I have seen) and present in the same way as you have done many times over the last few years. Boring.”
Others said they were also keen to meet with the people actually managing the money rather than sales people or senior directors at the firm and yet more urged all presenters to avoid the jargon and speak in plain English.
Sticking to time was also a top tip for some, as one respondent succinctly explained. He his advice was simple: “Stand up. Speak up. Shut up. Sit down.”
Written by Jonathan Stapleton, Professional Pensions Editor-in-Chief