Would You Hire an Investment Manager That Did Not Track Performance?

/ October 30, 2016 October 30, 2016

Would you hire an investment manager that did not track it’s performance?

I recently reviewed all of the claims data for our clients over the last 10 years and the Compound Annual Growth Rate in claim for our clientele was 4.5% compared to an industry average of 9% over that same period.  Even I was taken aback by that statistic.  If a hedge fund outperformed their peers by such numbers, they would be the “Kings” of Wall Street.

In fact, when I calculated that number, it occurred to me that we are probably one of the only firms that track our own performance.  In an industry where costs have increased for employers at a staggering rate, it astonishes me that I know of few (if any) firms that track their performance against industry trends.  If you were investing $1,000,000 with an investment firm, wouldn’t you want them to track their performance?

If your consultant isn’t tracking this data, they should be.  When we started looking back at our performance and tracking it a few years ago, we did it with a bit of concern. We didn’t know what we’d find out.  There was a cringe in checking to answer the question “does all the effort we put in really make a difference”?  I’m happy to say that it does.  And I’m even happier to say that over the past 3 years, our growth in trend has been 0%.

That’s right, no growth in claims for our clientele.