Survey Shows Many Investors Unhappy With Fund Managers

by Carla Johnson, Investors Offshore, London

28 January 2002

Consultancy firm Andersen has conducted a survey of fund managers and their individual wealthy clients which shows that the latter are becoming more adventurous in terms of appetite for risk, and more demanding of their advisers. Fund managers who don't satisfy their clients are being dropped in incfreasing numbers.

The survey, of 270 asset managers around the world and 289 clients with at least $1m in assets, found that 32 per cent of wealthy clients were unhappy with their bankers over risk levels and fees and could move. 68% of fund managers said clients had become more conservative last year, but 62% of investors said their risk appetite had increased or stayed the same.

"Asset managers are underestimating the risk tolerance of the high net worth individual. Their perception of risk is out of line with their sophisticated client base," the survey says. The survey said managers' lack of familiarity with alternative investment products was a handicap.

80% of investors said the level of risk their fund manager was prepared to take was the second most important criteria in selecting a firm, after confidentiality. "High net worth individuals prize performance and are keen to take on more risk. If they're unable to get it from their asset managers, they may seek it elsewhere and erode asset managers' client base," the survey said.

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