Smart money: How to gauge success

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William C. Fisher
William C. Fisher
The real question is: Does your investment advisor understand your business and consistently deliver what you need in terms of communication, reporting, investment policies and performance?

2011 has been a very volatile year. Ask yourself: Are you pleased with your investment advisor? What is the value proposition of your investment advisor? Has he or she truly stood in your shoes and tried to give your organization the desired outcomes? 

The value your advisor offers should be easy to understand and distinct from other advisors. A clear understanding of the valued outcomes the investment advisor provides helps form a solid foundation for improving what is delivered to senior living organizations. It is simply not enough for a firm to tell you that it manages money and has a “value” or “growth” story.

Just beating an investment performance benchmark or having a written financial plan is probably not the desired final outcome the CFO seeks. What seems to matter more to senior living executives is achieving a sense of comfort and security as it relates to financial outcomes. These outcomes must be consistently delivered through disciplined implementation.

It is also important to realize that the investment advisor may not seem empathetic but is doing the job. The “comfort” level of your finance committee may be different from that of the investment advisor. The advisor might be getting good investment results compared to the market but such results might not agree with the “comfort” level of the finance committee.

Know how to measure the success of whom you have chosen to manage your firm's investments. When the executive team believes in its mission, it encounters challenges and roadblocks along the way to achieving goals.

In the same manner, markets and investment results help you decide if you are achieving the investment success you need to accomplish the mission. I will be addressing some of the above issues in future articles.