Lessons Learned

Lessons Learned

With over three decades helping asset management firms grow in the institutional investor market, we have learned some invaluable lessons on how to maximize an investment firm’s ability to endure.

1. Be client-centric.

While putting clients’ interests first seems like a given, there are firms recognized more as asset gatherers than as asset managers. Or firms that are more focused on quarterly revenues, expenses and profits than on client outcomes. If you are truly client-centric, you will build a culture that always puts client interests first. You will employ experienced professionals who care about their clients across all areas. You will control the growth trajectory of the firm overall and for each strategy to ensure your clients benefit. Your professionals will listen to, engage with and serve every client of the firm. You will stay deeply entrenched in understanding client needs as they evolve. You will have competitive and transparent fees.

2. Vary your client base.

If all your clients are in one region or in one type of investor category, your risk of loss is higher should the client base become unhappy with your firm. Investors share information with each other. If one public fund client fires you, it will become known fairly quickly. If two or three fire you, you may face a mass exodus.

3. Diversify your investment offerings appropriately.

If you have too few strategies, or are a niche manager you risk your approach becoming out of favor, or performing poorly relative to benchmarks or competitors, and having no growth. Conversely, if you have too many offerings, investors may question what you are good at, or misunderstand what you are offering. Be strategic in developing your plan for growth.

4. Have sufficient capital for a three- to five-year runway.

If you are a new firm, assume it will take longer than you expect to achieve profitability. The barriers to entry have risen. Increased compliance, more stringent regulations, essential technologies, cybersecurity and relentless competition, along with fee pressures and high compensation demands, have made it much tougher for a new firm to launch, much less ascend. As a result, due diligence on an investment company’s ownership, compensation, financial strength and other business issues has deepened.

5. Define incentives that align interests with those of clients.

Ownership structure and compensation programs can make or break a firm long term. Incentives must be in place to attract and reward talent who in turn appreciate and care about achieving client goals.

6. Define a strategic marketing and sales plan, and implement with experts.

Still common in our industry are firms where marketing and sales professionals are treated like second-class citizens. A strong brand and effective messaging are keys to success. Developing a well-crafted plan to direct and focus your marketing and sales resources will give you an important competitive advantage. Skilled sales, consultant and client service professionals who understand the markets and client needs, and who know how to listen, marshal resources and solve problems are essential.

7. Know and articulate your strengths and distinctions.

The market is smart, skeptical and rich with choices. Yes, investors need to know what you do, but more importantly, how are you different and stronger than your competition? Does your value promise extend beyond just performance? In what ways? How can investors benefit more from working with you than others? Why can they trust you, and have confidence in the future of your relationship with them?

“Try not to become a man of success. Rather become a man of value.” ~ Albert Einstein

Any lessons learned that you wish to convey? Please comment below and share this article if you found it helpful. Stay engaged by following us!


Charnley & Røstvold, Inc., a preeminent marketing consulting firm to asset management firms ranging in size from start-up firms to some of the world’s largest investment firms with over $1 trillion under management. Charnley & Røstvold helps clients with competitive positioning, marketing strategies, key messages, presentation refinements, communications and sales training, consultant relations and client service programs.

Jackie Charnley, co-founder of Charnley & Røstvold, Inc., is a popular industry speaker and author. Jackie serves on the ICMA-RC Board, a not-for-profit company serving the financial needs of over one million public employees. She was also a founding board member of PAICR (Professional Association for Investment Communications Resources).

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