Preparation Plan for a Successful Final

“Confidence is preparation. Everything else is beyond your control.”
~ Richard Kline

You receive the call that you have been waiting for – “Yes, you are one of four finalists. You need to have your team at the prospect’s offices in Charlotte three weeks from Wednesday for an 11:00 a.m. presentation.” They request a portfolio manager, and let you know that you have 25 minutes of formal remarks and 15 minutes for questions. The rest is up to you. What do you do?

You can just select a portfolio manager who is available to attend with you, make travel arrangements, order the books and fly out the morning of the presentation, discussing on the flight who will cover what during the final.

Or, you implement your Preparation Plan for a Successful Final.

First, you ask the person who called you if there would be time for a call to learn more about the prospect. If yes, you schedule a call. If no, you ask your questions right then. Key questions are:

  • What are the main reasons for the search and what are they looking to accomplish?
  • Who are the participants and what are their roles? How knowledgeable are they?
  • What were the key reasons you were included as a finalist? If for replacement reasons, ask who was terminated and why.
  • On what do they want you to focus?
  • Are there any specific questions, objections or issues they want you to address?
  • Who are the existing managers, who are their competitors and how do you compare?
  • Will they share their Investment Policy Guidelines or any other materials with you?
  • Is there an opportunity for a breakfast, lunch or dinner?
  • Is there anything else you should know but haven’t asked?

Second, you research the prospect’s history, searching for press releases, articles, professional background, or speeches. You review the entity’s website. If a public plan, you review any meeting minutes and the manager line-up. You research the competitors, seeking to understand their competitive advantages and disadvantages relative to your own. You prepare a summary of your history with the prospect’s organization and the consultant (if there is one), what you learned from the phone conversation, and the research you conducted on the plan and competitors. You include the names and professional credentials of the individuals to whom you will be presenting. You create a list of likely questions and of tough questions that you may be asked, with concise, positive responses. You circulate the RFP response to be reviewed by anyone presenting.

Simultaneously, you review and decide who will be the optimal presenting team, and share the Preparation Plan documents with them. You arrange a meeting to agree on content, who will cover what, time allocations, logistics, attire and rehearsal times. You arrange to fly in the night before to have rehearsal time free of distractions from the office and to ensure you will be on time for the final.

You schedule your first rehearsal at least seven working days before the final. You have someone role-play the prospect and/or consultant. Using a prepared form that systematically and objectively reviews content and delivery of each presenter, you practice giving the presentation. You debrief, noting aspects that can be improved. You develop a personalized, succinct opening and close, and practice giving them. You note other areas where you can customize the presentation to the prospect’s areas of interest. You time each segment.

After rehearsing the presentation, you decide where it can be shortened, where transitions can be improved, and who will need more work to deliver as strong a presentation as possible. You practice responding to the likely questions and any tough questions you have been getting in the marketplace. You keep responses to about three sentences to permit the audience to ask for more information, and to avoid over-answering. You plan how you will resume the presentation after responding to questions. You practice using the names of the individuals with whom you will be meeting, and the name of the plan or prospect entity.

After you arrive at your destination, rehearse again, and make any final refinements. You all agree on a time and place to meet. The next afternoon, at 11:00 a.m. sharp, you walk in the room. As you meet your audience members, you smile, shake their hands and use their names. You are prepared.


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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Communicating for Success

Institutional investors want to buy asset management services that address their specific objectives and needs. They abhor being “sold.” How does an asset manager win business without “selling”? The answer lies in the ABC’s of communication – Authenticity, Brevity and Clarity.

Authenticity

Asset managers who do all the talking or who give the same cookie-cutter, “all about me” presentations to all audiences, fail the authenticity test. The most effective communicators have several common attributes. They:

  • Do their homework to learn as much about their client, prospect or consultant before they call, meet or present
  • Prepare and ask appropriate probing questions to elicit objectives, interests, concerns, challenges, and to promote dialogues
  • Personalize their communications in context to the client’s/prospect’s/consultant’s objectives and concerns
  • Listen well
  • Follow up and do what they say they will do

Importantly, the best communicators genuinely put the client’s/prospect’s or consultant’s interests first. Good communicators make certain there is a relevant fit. They also convey the benefits of developing a relationship and of working together.

Brevity

For successful written and verbal communications, less is more. Fifteen-page presentations are more effective than 100-page tomes. Long-winded explanations and over-answers to questions are the kiss of death. Use the “power of three” to frame your points. For example: “We have confidence in the repeatability of our process and consistency of alpha for three reasons: First, our investment philosophy and process that have delivered over multiple market cycles. Second, the depth and tenure of our investment team. Third, our exceptional risk management.” Also limit responses to questions to three sentences. Allow people to ask for additional details if interested. For example: “We sell stocks for three reasons…Would you like me to give you an example?” Avoid run-on sentences and empty phrases such as, “If I may…,” “I would like to…,” and “I’m going to tell you.” When you are concise, it is easier for people to absorb your information, and they are more likely to ask you more questions and engage in a dialogue with you. Above all, honor requested time constraints and finish early when possible.

Clarity

Institutional investors must understand the process that achieved a track record, and have confidence in the repeatability of the process and track record. The most important way to accomplish this is to “show” versus just tell. Give examples and tell stories to bring your process to life. Cite facts and figures to show the depth of your knowledge. Avoid using industry jargon and define any technical terms you do use. Show “videos” versus snapshots of portfolio characteristics and composition over time. Show performance attribution to help investors understand whether the majority of your returns come from stock selection or a combination of disciplines. Manage expectations and be clear on periods when your strategy can be expected to outperform and to underperform. Show performance over rolling periods, and to qualify and attract long-term investors. When you partner with clients to develop a customized solution, define benchmarks by which they can measure your success, and be transparent. Invite questions and confirm that you have been clear.

Being a skilled communicator is essential to long-term business success, as well as to strong long-term relationships. While we all know people who are naturally gifted communicators, the reality is that most people need to work at communicating well. It is easy to pick up filler words (“so, and, uh, um”), or for analytical types, to use tentative language (“we try,” “we think,” “kind of,” etc.). A valuable source to observe brief presentations by strong, effective, inspiring communicators is Ted Talks (www.ted.com/talks). You can be certain that these speakers have been coached and all have rehearsed. Mastering the ABC’s of Communication is an ongoing process that requires commitment, thought and practice.

“Communication is a skill that you can learn. It’s like riding a bicycle or typing. If you’re willing to work at it, you can rapidly improve the quality of every part of your life.” – Brian Tracy


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.

Christine Røstvold, co-founder of Charnley & Røstvold, Inc., is a popular industry speaker and author. Christine was a founding board member of PAICR (Professional Association for Investment Communications Resources), and served on the Advisory Board for more than a decade.

Hastening the Greater Good: ESG Investment

At first glance, a marriage between fiduciary investors and ESG (environmental, social and corporate governance) investing would seem destined for rocky roads. ESG can cover everything from corporate governance, business ethics, sustainability management, climate change, ecosystem services, and environmental management to human rights, public health and labor standards. How do these attributes mesh with strong company fundamentals and investment potential?

The initial concerns of fiduciary investors regarding ESG investing included “limited universe,” “performance sacrifices” or “alpha deterioration.” Studies are showing, however, that the exact opposite is true. ESG is more than a pretty face. According to a Deutsche Bank 2012 study – Sustainable Investing: Establishing Long-term Value and Performance – a portfolio coupling fiduciary investors with ESG investing would be happy and fulfilling, especially over the long term. High ESG ratings correlated with a lower cost of capital in 100% of the studies; with market-based outperformance in 89%; and with accounting-based outperformance in 85%. Performance in sustainability investments has usually met, and often exceeded, the performance of comparable traditional investments. An April 2015 Morgan Stanley Institute for Sustainable Investing study of U.S.-based Mutual Funds and Separately Managed Accounts confirmed, “This is true on both an absolute and a risk-adjusted basis, across asset classes and over time.” The study also concluded that there is a “positive relationship between corporate investment in sustainability, and stock price and operational performance.” High ESG ratings also correlate with better environment and human rights practices. Good for investors, for people and for the world.

Values, old-fashioned values, re-expressed through technology, corporate leadership and innovation, are turning out to be rewarding for investors. It stands to reason. Consider whether you want to invest (put your capital to work) in the hospitality industry where human trafficking is a major dilemma. Or in stocks of manufacturing or retail companies that profit from child labor. Or in stocks of companies that harm the environment through high carbon emissions or exposure to spills of toxic materials. In today’s increasingly transparent world, people uncover transgressions and communicate their discoveries fast and in real time. Companies are discovering that hurting the environment, breaking laws and/or moral codes, or harming towns or villages can damage a company as quickly and thoroughly as a disruptive innovation.

ESG investing has evolved from just being a screen for negative characteristics to being a guide for selecting investments that in addition to the potential for alpha, have desirable social, economic or environmental attributes. Addressing carbon emissions, water and air safety, and human rights can lead to a superior competitive position over the long term. Socially responsible investors are also taking activist roles to further a company’s success in resolving issues and to work directly to change behavior. Activism is not always necessary for positive change. As the Morgan Stanley report cited, “A 2014 study by Ceres found that 60 percent of Fortune 100 companies voluntarily set clean energy and greenhouse gas reduction targets, saving an aggregate of $1.1 billion annually from 30,000 projects.”

The result is increasing growth in ESG investing.

Graph. Source: Morgan Stanley Institute for Sustainable Investing.
Source: Morgan Stanley Institute for Sustainable Investing

While ESG happens to be a millennial investment preference, as documented by multiple research reports and surveys, it is turning out to be age-agnostic in appeal. The growth in ESG is leading to better tools for analyzing ESG factors relevant to a company and to integrating ESG parameters into portfolios. Continued evolution will be natural, drawing from yet unknown risk management and analytical tools, valuation models and correlation analyses to improve the results from ESG investing even further.

The marriage of fiduciary investors and ESG investing is likely to prosper and thrive over the next decades. Positive outcomes from successful and thoughtful deployment of capital aligned with important values will grow exponentially. May they live happily ever after.


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).

Positioning Your Firm for Long-Term Success

Whether you are building your firm with an eye to sell, or creating a business you want to endure in perpetuity, effectively positioning your firm for the future requires three key ingredients:

  1. A clear vision of what you want your firm to look like in five to ten years
  2. Buy-in and cohesive effort from your firm’s senior leaders and employees
  3. A well-defined plan of action to achieve your vision

Achieving a Clear Vision

In developing your competitive positioning and key messages, you must look beyond the firm, the services, the resources, and the clients you have today. What do you aspire to do? Remain an investment specialist, broaden your offerings or evolve to a custom solutions provider? Maintain a small, nimble investment team or broaden your investment platform? Serve a selective clientele or diversify your client base? Focus on a predominantly retail or high net worth business, or become an institutional-caliber asset manager? Remain independent, align with a strategic distribution partner, go public or sell? You must consider the changing objectives and challenges of your clients, and build and position your firm to attract clients who will be a good long-term fit for your firm.

Progressing with a United Front

A cohesive, well-communicated vision is essential to long-term success for an asset management firm. Self-assessment is a necessary step to determine where you have commonality of views and where there are differences of opinion. Survey your firm’s leadership team, senior investment professionals, and client service and sales professionals on their perceptions of your firm’s strengths, growth opportunities and competitive challenges. Work together to develop a realistic plan, to build on your strengths and to address your differences. Communicate to every level of the firm. A united team will go further faster than a strong leader with one vision and a group of dissenters.

Defining and Implementing a Plan of Action

The firms most successful in achieving their long-term vision and goals carefully plan their routes to fulfill those goals. The Plan of Action must be a living plan that includes a timeline, milestones, resources needed, and collective and individual responsibilities. You must review the plan regularly (ideally quarterly), assess progress (successes and disappointments) and modify the plan as appropriate. Strong leadership, individual accountability, frequent and transparent internal communications, and flexibility are needed to ensure successful implementation of the plan.

To achieve long-term success, set your sights high, leave nothing to chance and avoid complacency at all costs. “No matter how many goals you have achieved, you must set your sights on a higher one.” ~ Jessica Savitch


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.

Christine Røstvold, co-founder of Charnley & Røstvold, Inc., is a popular industry speaker and author. Christine was a founding board member of PAICR (Professional Association for Investment Communications Resources), and served on the Advisory Board for more than a decade.

Growing as an Emerging Manager

“It was the best of times, it was the worst of times…”

Charles Dickens could easily have been writing about launching a new investment management firm in today’s environment. Barriers to entry are higher than ever. Compliance, legal regulations, infrastructure, technology and systems, branding and marketing, distribution – all are more complex and costly now than even just five years ago. At the same time, outsourcing, emerging manager platforms, databases, the Internet, capital investors, loosening investment guidelines and constraints – all in combination make it the best time to launch a new investment firm.

The classification for emerging managers has evolved and expanded. Emerging managers today are more loosely defined as managers with track records shorter than three years and assets under management below a specified level. Different emerging manager platforms and investors set the desired assets at different levels – anywhere from below $500 million to under $3 billion. A minority- or woman-owned status may or may not be required. Numerous studies have confirmed that smaller, more nimble firms may offer an alpha advantage. As a result, investors are turning to emerging managers more in an effort to generate alpha than to meet diversity needs. The same is true in alternative asset classes where smaller managers are considered more likely to have an edge. Investments today span traditional equity and fixed income, global (developed, emerging and frontier) markets, market capitalization size, real estate, real asset, private equity, long/short and other alternatives.

Numerous Perceived Advantages

The alpha advantages of emerging firms are attributed to:

  • Execution advantages and nimbleness resulting from small assets under management
  • Predominant focus on one strategy (possibly with different applications or restraints)
  • Tendency to have higher-conviction portfolios
  • Flat management structure
  • Strongly aligned interests (owners have significant financial stakes in the success of their investment approaches and firms)
  • Low cost structure
  • Less likely to hit liquidity constraints or cause a market impact
  • Likely to be implementing industry’s current best practices
  • Opportunity for equity investment in some cases

There is some sense of urgency to discovering newer, smaller firms with competitive alpha advantages before their assets grow too large and possibly erode the alpha potential.

Challenges to Emerging Managers

At the same time, newer or smaller managers face obstacles to successful growth due to:

  • Short length of track record
  • Lack of name recognition
  • Too little assets under management or capacity constraints
  • Too few clients in a strategy
  • Too small of an investment team
  • Short-term performance or volatility issues
  • Lack of SEC registration because of size
  • Resource, technology, distribution constraints
  • Operational risks
  • Business risks – failure to generate enough revenue to support its costs, growth and development

Opportunity from Emerging Manager Platforms/Capital Access Partners

The emerging manager platforms appeal to investors for several reasons. They are organized to provide investors access to new managers, institutional-quality due diligence, ongoing monitoring, fee negotiation and diversification. The platforms also each have distinct emerging manager criteria regarding maximum amount of assets under management, track record, and minority- or women-owned status. Emerging managers benefit from the platforms’ support in multiple areas:

  • Capital access
  • Business advice
  • Outsourcing opportunities
  • Marketing and distribution

Because there is an increasing number of emerging managers, there is a broad opportunity for early stage investors. As a result, they are leveraging their negotiation powers across such factors as liquidity terms, transparency, corporate governance, fee structure and incentive fees or a “claw-back” of the performance fee in the event a manager fails to achieve a targeted return.

Criteria for Selection

The platforms generally accept the impediments described above that are related to an emerging manager’s newness. The primary criteria expected from emerging managers, regardless of ownership status, are likely to include:

  • Clearly defined business plan that documents the emerging manager’s qualifications, capital needs, fee structure, break-even points, target markets and distribution; financial strength and demonstrated sustainability for at least three to five years; significant investment alongside investors/clients; institutional-ready in terms of: compliance, operations, reporting; analytics; trading policies; business continuity/disaster recovery plan; cybersecurity
  • An investment-driven firm with well-qualified, experienced people to lead investments, business management, research, trading, client service and distribution, legal and compliance, operations and administration; high-quality outsourced resources (e.g., back office, legal/compliance), where needed; adequate technology, systems and resources
  • Well-articulated investment process that conveys the value proposition concisely and clearly, along with well-defined risk management disciplines; a process that is repeatable; a culture that encourages challenges to the investment premise and a commitment to continual improvement; a defined process and appropriate resources for research
  • Clearly understood capacity and appropriate growth objectives
  • A client service model that is relevant to the firm’s target markets

In summary, the best time to launch an investment firm is when there is talent, clear ability to add value, commitment, financial sustainability and market demand. Many firms launched post- crisis are thriving in this challenging new world, bringing much-needed high quality investment management to fulfill the needs of institutional and retail markets.

Excerpt from Charnley & Røstvold, Inc. Emerging Managers Research, 2015
By Jacqueline L. Charnley

© 2016 Charnley & Røstvold, Inc.


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).