Choosing the right outsourced CIO provider
Helping institutional investors pursue their investing goals.
As the fiduciary for your organization, only you can decide what decisions your organization will retain, what decisions to outsource and how to work with your service provider to help you achieve your investing goals.
When we work with a new client, we recommend a simple rule:
Retain control over the decisions you have the expertise to make and the time and resources to implement, and delegate the rest.
When choosing your provider consider:
Their approach to working with you and the amount of customization they provide.
The years and depth of experience the organization has with outsourcing.
Their understanding of today's volatile markets and their ability to flexibly adapt.
The cultural fit with your organization.
Their reputation in the industry and level of integrity.
You're looking for a team of professionals who know the needs of organizations like yours, and who are as passionate as you are about achieving your goals.
Working with a provider who can combine strategic advice, asset management and implementation expertise into a single relationship, may allow you the total portfolio perspective to meet your objectives.
We are a globally recognized leader of institutional investment outsourcing.
We are continually recognized for excellence in our industry.
Our experience and performance have placed us in good company.
When you invest, it's good to know you're among the best. Russell Investments has been globally recognized for excellence in the investment industry.
We have a proven track record in investment outsourcing, with scale, client satisfaction, innovative solutions, and decades of experience.
Comparing OCIO provider fees
There's still a wide variety of solutions on offer in the realm of OCIO providers, and it can be hard to get a "like to like" view of the services being offered. The fiduciaries we talk with continually tell us that one of the most confusing elements of the OCIO provider selection process is fees. One provider's "all in" fee may include everything – manager fees, manager change fees, trust, custody, travel for your client service team, reporting, etc. – while another provider's "all in" fee may only include some of those items and additional expenses will be charged piecemeal throughout the year.
The questions in it cover these key areas:
- Organizational history, structure and experience
- Services provided by the firm, including investment, custodial & trust, and administrative
- Clients served by the firm, including type, duration, experience, and AUM
- Strategic advice
- Asset allocation strategy and investment philosophy
- Portfolio construction and manager research process
- Client service philosophy and team
- Risk management process, monitoring and systems
Seven questions to ask investment outsourcing providers:
Do they draw the line at advice?
Consultants provide vital advice. Asset managers bring that advice to life. Don't be forced to choose between the two when you can have the best of both worlds. Russell Investments has four decades of experience in both advising and managing multi-manager, multi-asset portfolios.
Do they actively manage client portfolios?
Hire a provider who will commit portfolio managers to work on your portfolio in real time every day, taking advantage of immediate opportunities and dislocations in the market.
Are they truly focused on investment outsourcing?
If they’re new to the outsourcing business, are you willing to help them learn it? Choose a provider who has decades of hands-on investment outsourcing experience.
How customized is their "customized" approach?
Here's a simple checklist. Can they tailor the level of outsourcing discretion to suit your committee's appetite? Can they incorporate only those program elements that you want, without charging you for those you don't need?
Will they limit my investment options?
Active. Passive. Single manager. Multi-manager. Alternatives. Your choice of provider should not constrain the investment program you want to build. Beware of captive programs that limit your choices.
Will they measure progress against the goals that matter to me?
Are they focused solely on beating asset class benchmarks or also on the outcomes that matter most to your organization? Performance is important, but progress is essential – your participants can exceed return benchmarks in every asset class and still lose ground.
How strong are they in research? In implementation?
Your investment program needs industry-leading research and award-winning implementation services. Your committee deserves thought leadership and access to innovative, results-oriented strategies.
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