By Mark Keogh, Head of Asset Management at Blackfinch Group

When advisers review an investment manager, the conversation often begins with what you’d expect: investment philosophy, risk management, cost, performance and the construction of the portfolios themselves.  

These points should form part of the conversation, but they do not paint the whole picture. They certainly don’t tell you what the relationship will feel like once the service is in place.

That only becomes clearer later, when markets move sharply, when a client needs reassurance, when regulation changes or when an advice firm reaches the point where its existing proposition no longer fits the way the business wants to work. It is in those moments that the quality of the investment partner relationship is tested.

A good investment manager should not simply provide portfolios and periodic reporting. It should understand how your firm operates, recognise the pressures your advisers face, support the conversations you have with clients and remain capable of adapting as your needs change.

So that leaves us with the key question, what should advisers expect from a strong investment relationship?

It begins with the partner understanding your firm

No two advice firms are the same, each has its own client base, investment beliefs, charging structure, platform relationships, governance processes, communication style and plans for growth. A firm with a well-established Centralised Investment & Retirement Proposition may need something very different from a business that is reviewing its approach for the first time, while a growing firm may place greater emphasis on consistency, scalability and oversight than it did a few years earlier.

That is why the first conversation with an investment manager cannot be a product presentation. It should and has to be a discovery exercise.

Before discussing portfolios, the investment manager should seek to understand what the firm wants to achieve, where its current proposition is creating friction, which elements of the client experience need to remain consistent and where greater flexibility could add value. For firms reviewing a Centralised Investment Proposition or Centralised Retirement Proposition, this clarity is essential because the objective should be to solve a defined business or client challenge, not simply replace one service with another.  

A strong investment relationship starts with the adviser firm rather than the investment solution, because only then can the service be shaped around what the business is trying to protect, improve and develop. 

Access should be meaningful

Most investment managers describe themselves as accessible, but what that really means varies across the industry.

Can you speak directly to the people making investment decisions? Can you ask questions about changing market conditions and receive a clear answer? Can the investment team help you explain a portfolio decision when a client is concerned? 
If you are looking to build a new client relationship and need support around their current investments, can you discuss that with your partner, can they help?

During calmer periods, direct access may seem like a useful addition but during periods of volatility, it becomes basis of the entire relationship.

Clients may never meet the investment manager, but they should still feel the benefit through the confidence, clarity and context their adviser is able to provide as an intermediary. That is why access cannot be treated as a marketing line and instead should be embedded in the day-to-day relationship.

The key takeaway here is that expertise is only valuable when advisers can reach it at the point it is needed.

The relationship should be able to evolve

Markets evolve; regulation evolves and client expectations evolve. All the while advice firms develop as they grow. The investment relationship should be capable of moving forward with them.

That means creating clear opportunities for advisers to contribute feedback, challenge assumptions and take part in discussions about how the proposition develops over time. Investment committees can play an important role here because they provide a structured forum for reviewing performance, risk, costs and portfolio changes, while also giving advisers a place to raise ideas and share what they are hearing from clients.

This does not mean every short-term view should lead to a portfolio change. But what it does mean is that the relationship should allow for challenge, explanation and adaptation where the evidence and the firm’s objectives support it.

A relationship becomes stronger when it works as a two-way partnership, where adviser feedback is heard and both sides work together to create better outcomes.

Communication is essential

Clients want to understand what is happening, why it matters and whether their long-term plan remains on track. Advisers are responsible for bringing that conversation back to the client’s wider financial plan, but the investment manager can either make that task easier or add another layer of complexity.

Useful support may include regular reporting, market commentary, client-facing literature, presentations and plain-English explanations of portfolio decisions. It is important to note that any and all providers are likely to offer these things as standard, but the language they use is what matters most. Clients don’t need more jargon, they need clear reasons, useful context and content they can consume.

This is where a strong investment relationship can support a stronger client relationship. The investment manager provides the technical detail and market context that is easily digestible. The adviser turns that into a meaningful conversation about the client’s objectives, concerns and long-term plan.

Value is wider than price

Cost matters, particularly as firms continue to assess fair value and demonstrate that their proposition is meeting client needs.

But the lowest headline price does not always represent the strongest value. Advisers should also consider what the relationship helps the firm deliver.

• Does the service reduce unnecessary complexity?
• Does it support governance? Does it provide clear and usable communication?
• Can advisers reach the investment team?
• Can the proposition evolve as the firm grows?

A relationship that saves time, strengthens communication and supports better oversight may create value in ways that do not appear in a headline fee.

Onboarding should be the beginning

Appointing an investment manager should be the first step in the journey. Over time, the investment team should learn more about the firm, communication should become more relevant, and adviser feedback should help shape what happens next.

The best relationships deepen after onboarding because both sides develop a better understanding of how to work together. That continuity allows the relationship to adapt more quickly, the proposition to evolve with greater confidence and the adviser to remain focused on the clients who rely on them.

A good investment partner should provide sound portfolio management, but a strong investment relationship should go further. It should help advisers stay close to clients, respond with confidence when markets become difficult and evolve their proposition without losing sight of what made the firm distinctive in the first place.

The portfolios matter but it is often the relationship around them that advisers, and ultimately their clients, feel most.

Finding the right investment partner

For advisers, choosing an investment manager is about more than selecting portfolios. It is about finding a partner that understands your firm, supports your client conversations and can adapt as your proposition evolves.

That is the approach we take at Blackfinch Asset Management. We work closely with adviser firms to understand what they need from their investment proposition, combining investment expertise with meaningful access, clear communication and ongoing support.

Whether you are reviewing your existing approach, considering outsourcing investment management or looking for greater flexibility as your firm grows, the right partnership can make a meaningful difference.

Speak to our team to find out how we could support your investment proposition and the clients you serve.

Learn more about Blackfinch Asset Management →

If you’d like to here more from Mark about what makes a good investment partner, listen to the IFA Talk podcast where he dived into the topic with host Matt Williams and Jenny Hunter. Listen here →