Think Before You Invest

Many institutions,banks being a good example, had a long tradition of only offering clients access to the bank's own investment vehicles. On the one hand, they did not have the infrastructure in place to monitor constantly a pool of over 40,000 funds available worldwide. On the other hand, they defended their “in-house” policy on the largely justifiable grounds of due diligence. Institutions rightly felt comfortable recommending their own products to their own clients.

When recommending a fund from an outside supplier, the institution must be in position to assure its client with regard to a number of key factors – the creditworthiness of this third party, the robustness of their investment procedures, the credentials of the fund manager, the like hood of maintaining decent levels of performance, their risk-adjusted return and so on.