A. ORGANIZATION AND BACKGROUND
1. Briefly describe the organization, the year it was founded, location of its headquarters and other offices, its ownership structure, and any affiliations with other companies.
2. Please describe the entire range of consulting services your firm provides to its clients. Indicate which services are the firm’s specialties or areas of greater expertise, and describe how the expertise is maintained and expanded.
3. Briefly outline your future plans for the consulting business, including growth plans, number of consultants and areas of specialization.
4. Disclose all conflicts of interest the firm has in serving in an investment advisor relationship (e.g., relationships with custodians, investment managers, brokerage firms, etc.).
B. STAFFING
List the personnel you propose to assign to this relationship and their responsibilities. Provide brief biographical information on each individual, including their positions in the company, education, training, years and type of experience in investment management, major clients and experience.
Give a brief description of the firm’s compensation arrangements for senior consulting staff, including any incentive compensation plans. Are there any other incentive arrangements employed to help retain key professionals?
C. CLIENTS/REFERENCES
1. Provide a representative list of current clients.
2. Attach list of three references. Indicate the contact name, address and telephone number.
D. MANAGER SEARCH/SELECTION
1. Describe the database utilized to monitor and evaluate investment managers’ performance for the purpose of manager selection. Is it proprietary or third-party? If third-party, who is the vendor? Do you receive any direct or indirect compensation from investment managers to be included in your database? How many investment managers are included in the database? How frequently is the investment management information updated, and what are the sources of data?
2. Describe thoroughly the firm’s process for identifying, evaluating and selecting potential investment managers for a specific client.
3. What is the firm’s process for meeting and conducting on-site visits with investment managers?
E. PERFORMANCE MEASUREMENT AND EVALUATION
1. Describe the methods and sources of data used for analyzing the performance of investment managers and the portfolio. Specifically, include the monitoring of performance, risk, style integrity, manager guideline compliance, account restrictions, etc.
2. How many business days after the end of a reporting period are the performance reports available? Can the reports be customized?
3. Provide sample quarterly client reporting and a sample monthly performance update.
F. TECHNOLOGY
1. What technology capabilities does the firm have to add value and efficiencies to the investment consulting and monitoring process (e.g., electronic submission of performance reports to client)? Does the firm have a web site? If so, what information is available to clients? What is the internet address?
G. ASSET ALLOCATION MODELING/PORTFOLIO STRUCTURE/COMMENTS ON PORTFOLIOS
1. Discuss the methodology used for asset allocation modeling.
2. Comment on the firm’s philosophy and any portfolio structure biases in the following areas:
- Active versus passive management
- Capitalization (e.g., overweight to mid/small)
- Style (growth tilt, value tilt, or neutral)
3. Describe the experience the firm has with alternative investments (e.g., venture capital, private equity, real estate, hedge funds, etc.). Does the firm have alternative investment specialists? Provide a description of how alternative investments are used in current clients’ portfolios, including dollars and percentage committed and number of clients utilizing this asset class.
H. FEES
What are the proposed fees for a full retainer basis (including all out-of-pocket expenses) and what services are provided for that?
I. SUMMARY
What do you believe sets the firm’s services apart from the competition, and what unique value-added services could you provide?