15 Sep 2015

Springsteen and the Dynamics of Collaborative Partnerships

Adam Geha

15 Sep 2015

positioner

In the long and labyrinthine annals of investment literature you will not hear this often said – but the simple act of meeting with your investment manager on a regular basis is one of the most important things you can do to boost your returns.

You should aim to meet with your investment manager about once a month and preferably one-on-one.

It need not be a formal meeting, it can be a quick coffee or lunch catch up – or if time doesn’t permit, a 10-minute phone conversation on your way in to work. It may seem trivial, but these regular interactions will make an appreciable difference to your bottom line.

Why? Because relationships really matter. And they matter all the more when the relationship is a long term collaborative partnership.

In the final analysis, people are not inspired to give of their best merely by targets or success fees – they are inspired to give of their best to people they care about and with whom they have an authentic connection.

About ten years ago, I heard Bruce Springsteen say something in an interview that changed the way I attended live events. He said that most people come to a concert expecting to be entertained but fail to realise that they are part of the act. The performers on stage are often touted as demi gods, but the truth is they need to feed off the energy of the crowd if they are to summon the energy for a great performance.

The worst concerts, Springsteen said, occurred when the audience sat back critically and waited to be entertained. While the best performances occurred when the audience and the performers formed part of a continuous positive energy loop.

The same holds true for your investment manager. You have every right to sit back passively or critically and wait for your manager to perform or perish. After all, much like the concert, you’ve paid good money for the performance.

But if you have already chosen a smart, driven, aligned manager, then the best way to enhance your returns is to develop a long term collaborative partnership.

You would be surprised how providing constructive feedback, asking thoughtful questions, making useful suggestions, offering introductions or simply saying thank you for a job well done can have a massive impact on your fund manager’s motivation to perform and their willingness to go the extra mile.

And in an age of emails, text messages and virtual relationships - nothing beats the immediacy of showing up in person.

It may not be 80% of success, as Woody Allen famously quipped - but showing up and actively engaging with your fund manager will produce surprisingly powerful results.

Oh, and one last thing – if your investment manager finds it a distraction or a nuisance to meet with you on a regular basis, they’re the wrong manager for you. Get rid of them.