Watching the musical chairs
Investors need to pay closer attention to the growing number of key staff departures in the financial investment industry when selecting fund managers.
According to MLC investment analyst John Owen, the number of staff departures of key personnel has shot up to 27 people in 2007 alone.
“The average tenure of a senior equities head is now only two years, while chief investment officers are not much better, especially the under performing ones, at 2.5 years,” he said.
Owen said that for many financial institutions, having one key person make the most important decisions that will eventually affect clients’ portfolios is common.
“Given these numbers, you had better make sure of two things. Firstly, that you know who those key decision makers are. And secondly, that you have a strategy in place so that if that key person was to get hit by a bus on Pitt Street, or change their jobs you know what to do.
“We know that there are many key people moving around in this industry, so you really have to worry about manager selection issues and try to isolate where the strengths within that manager lies, which is more often than not, in its key people.”
AUTHOR
George Liondis
Recommended for you
Wealth Data has revealed the top five licensees for financial adviser growth over the September quarter, with more than 150 advisers joining in Q3 overall.
Former Sydney financial adviser, David Valvo, has pled guilty in court to a charge of dishonest conduct.
Building a network of mentors and coaches with varied skill sets could help women achieve their career goals, according to an FBAA executive.
AMP has reported its Q3 results and provided a progress update on the divestment of its advice division to Entireti.
