Flash v. Substance: Investment Awards That Matter
25 March 2020
25 March 2020
Henderson Rowe is disrupting the UK market by delivering institutional-quality investment solutions directly to private clients. In this investor education article, Dominic Wright, a Senior Investment Manager at Henderson Rowe, offers perspective on how to separate the flash and glamour of awards from more substantive contributions to the investment management industry.
This article was originally published in a personal blog post on 25 March 2020
When collecting HBO’s Comedian Award in 2007, Jerry Seinfeld put into words what we all secretly think:
“Awards are stupid. Every real estate office has some framed, five-diamond president’s award thing by the desk, every hotel check-in has some gold circle service thing; every car salesman is a platinum jubilee winner. But the hotel sucks, the real estate person is stupid, and the only thing the car salesman is good at is ripping you off.”
Like many of Seinfeld’s jokes, this one is funny because it rings true. It’s especially true in the finance industry, where dozens of organisations dole out a never-ending stream of awards to wealth managers. In the absence of an Academy or BAFTA, it’s impossible for private clients to distinguish flash from substance during the annual awards procession.
A London-based organisation once told me our award gongs would be proportional to the number of tables we purchased at a dinner ceremony. I appreciated his candour (if not his scruples) but, frankly, his comment was no surprise. The UK wealth management business is rife with a glamour that often obscures a lack of substance. Awards season puts this on full display.
Unlike retail investors, institutional investors are not dazzled by flashy plaques and trophies – they know how to separate awards that matter from those that don’t. The awards they care about are those that demonstrate superior research or investment capabilities. You don’t win Graham & Dodd Awards, Bernstein Fabozzi/Jacobs Levy Awards, and William F. Sharpe Awards by purchasing tables at glitzy events. You win them by producing premier-quality research that enhances our understanding of finance and markets.
So if, like Jerry Seinfeld, you roll your eyes at garish rosettes displayed prominently on an estate agent’s desk, you might follow the lead of institutional investors. Look for awards that reflect the quality of an organization’s research and investment capabilities, and discount those that are simply reward popularity, contributions, or shared financial interest. Your portfolio will thank you.
This document does not constitute a financial promotion under Section 21 of the Financial Services and Markets Act 2000 (‘FSMA’). Henderson Rowe is a registered trading name of Henderson Rowe Limited, which is authorised and regulated by the Financial Conduct Authority under Firm Reference Number 401809. Investing with Henderson Rowe or any other investment firm involves risks. Please ensure that you fully understand the risks before investing. The value of investments may go up as well as down and you may not get back the amount invested. Past performance is not an indicator of future performance.
The content of this article represents the writer’s own view. Nothing in this article constitutes investment, tax or legal advice.