Any other business: The oft-repeated phrase a journalist hears from an asset manager trying, often unsuccessfully, to garner support for a new product launch is, 'It's all about education'.
By which is meant telling a gaggle of trustees all about a strategy, why it is better than other strategies, and why it will exactly suit their needs.
Try and find other clients – look on their website for lists of customers – and cold call them for an opinion
Richard Butcher, PTL
Scheme professionals will recognise the pernicious term 'thought leadership', which has come to dominate the asset management industry in particular.
In an area where asset managers provide strategic investment advice, and consultants are beginning to run money, understanding how and when you are being sold to becomes especially important.
So how can scheme management teams separate the wheat from the chaff, even when they are in the market for a product? Richard Butcher, managing director at independent trustee company PTL, boiled it down to one phrase: "Do your homework and be sceptical."
Schemes should make providers prove any claim they make in relation to their products, he said, adding: "If they say they provide a great service, ask for client references or testimonials. If they say that they hit service standards 95 per cent of the time, ask them for independent verification."
Pension management teams could also ask for the following things:
Copies of internal and external compliance audits.
Commitments in writing that the provider has not had any breaches or complaints.
A copy, if any, of an anonymous complaint file.
References.
Barry Parr, co-chair of the Association of Member Nominated Trustees, said the dynamic will rest upon whether the circumstance is a planned presentation pitch, or an opportune one – a chance opportunity grabbed by either a scheme representative or a provider.
When it is a planned presentation, the request for proposal – which sets out the details and some of the limits of the requested service – should give scheme management teams a list of criteria to benchmark against, but there will still be an element of subjectivity at play.
Parr suggested the questions should include whether the board feels it could work with this individual or company, whether the person has expertise or an approach the scheme does not have, and whether any "unnecessary issues" will arrive.
"Timing is a key element," he added. "What is sales patter one day is useful information another. And of course, many business development or sales staff are only too well aware of that and their talent is in homing in quickly on what really matters to the client."
John Paradise, a member-nominated trustee for St Andrews Healthcare as well as a committee member of the AMNT, said it was key to determine whether the scheme could work with that person or their company.
He said: "Have they convinced me that they can add some value to the trustee board?" That can be a "difficult judgement to make", he added.
The trove of information available online, and particularly business media networks such as LinkedIn, can provide scheme managers with access and testimonials that were not previously available.
But direct references provided by the company, and even online feedback they have posted or received, may only present their happy customers. "Try and find other clients – look on their website for lists of customers – and cold call them for an opinion," said Butcher.
It is this mixture of scepticism and subjectivity that trustees see as crucial to seeing past the slick presentation – or "education" – and identifying a mutually beneficial provider-client relationship.
