Hiring An Investment Consulting Firm

YOUR DECISION TO HIRE AN INVESTMENT CONSULTANT CAN HAVE FAR-REACHING EFFECTS. Therefore, you must be sure that the firm you select is the one best suited to meet your needs now and in the years ahead. There are more than 100 investment consulting firms in the U.S. In order to narrow this field of potential candidates to a manageable number, you must establish the characteristics of the consultant you want to work with. Generally, these characteristics fall into one of two categories: service and organization.

DeMarche has developed a sample Request for Proposal for investment consulting services. This RFP should help you address the issues raised here and gather other important information about the firms you are considering.

THE SERVICE CHARACTERISTICS YOU SHOULD CONSIDER ARE:

>>	RANGE OF SERVICE: Do you want a full-service consulting firm that can handle a broad range of tasks, or a boutique to perform a specific project?
>>	DEPTH OF SERVICE: Do you want a data collector, information processor or an interpreter/advisor?
>>	DELIVERY OF SERVICE: Is a local office important, or are you comfortable with a consultant who serves your fund from a central office that may not be in your city?

ORGANIZATIONAL CHARACTERISTICS INCLUDE:

>>	OWNERSHIP: Is it important that your consulting firm be independently owned, or are you comfortable working with a firm that may be a subsidiary to a larger organization such as a brokerage, actuarial or accounting firm?
>>	EXPERIENCE AND QUALIFICATIONS: Will you be served by a true consultant or a sales representative who delivers services developed by other staff?
>>	QUALITY OF SERVICE: Determine if the firm uses sound management practices, is organized logically and has a low turnover history among its consultants. Does the firm have adequate quality control systems and the capacity to take on new business without jeopardizing the quality of service it delivers?
>>	REPUTATION AND REFERENCES: What is the firm's reputation in the industry? Is the firm willing to provide references and, if so, what do they say?