TAKING THE REINS

What works, what doesn’t

Whilemany people would argue that the recent financial crisis, economic shocks and scandals have significantly damaged investor trust, the good news from our survey is that third- party asset managers are performing reasonably well in the eyes of institutional investors (figure 6). This result is based on respondents being asked to rate their satisfaction (from0 to 9), with external asset managers on a number of criteria. This result is consistent across the European institutional market, as no significant differences in the level overall satisfaction were observed when taking into account the origin of participants.

More specifically, asset managers perform extremely well in respect to investment policy, their accessibility/responsiveness and their transparency in terms of performance. But how do asset managers perform around the KPIs we identified in the previous section? When it comes to the level of satisfaction around the KPIs, our respondents had a mixed feeling. In order to evaluate the level of satisfaction of institutional investors with asset mana- gers on the identified KPIs, we used two models: • the Satisfaction Gap Model (figure 7); • the Satisfaction and Importance Mapping (figure 8).

Figure 6

Figure 7

Overall level of satisfaction when dealing with external asset managers

Satisfaction Gap*

9

Performance Fees Performance RiskTransparency Quality of Reporting Fees

Good

> 6.9

6

Mediocre

Transparency Risk IndependentVeri cation Expertise Quality of Advice Operational Strength Quality of reporting

3

Poor

12

0

Expertise

Below expectation

Source: PwC-CACEIS survey 2012

-2.0 -1.5

-1.0

-0.5

0.0

-1.5

-1.0

-0.5

0.0

Source: PwC-CACEIS survey 2012 *The satisfaction gapwas obtained by subtracting the average level of importance from the average level of satisfaction for each criteria.

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