By Thomas D. Jordan, Chief Executive Officer, Public Trust Advisors
Building the Public’s Trust:
In our opinion the word trust has gradually eroded and has diminished meaning among the public funds sector. The word "trust" can be overused by asset managers when discussing public funds investing and it is often under-delivered by the firms who claim it to be one of their “values.”
From our perspective, there is no value more essential to every aspect of our business than the trust we build with our clients.
Trust is the prism through which public entities must evaluate fixed income asset managers to invest and manage public funds.
When evaluating a firm for the management of a local government investment pool or a separately managed account, it will quickly become apparent that there are a number of technically qualified fixed income asset managers and management services in the marketplace. Price, in the form of a firm’s management fee, is often the driver in the selection process, as is performance, track record, and the proposed scope of services. All of these “objective” elements can be procured from any number of asset management firms.
It is TRUST that sets us apart from the others. From relationships to customer service and from investment options to recommendations, trust is at the heart of all we do for you.
You have our word, and on that we deliver.
Rates Change, Values Should Not
We believe that for many public entities, the relationship with their fixed income asset managers has been altered by the current protracted low-interest rate environment. Fee pressure can change the behavior of the firms engaged in public funds investing. Firm business models, predicated on the ability to charge the now unthinkable fixed income “50 basis point” management fees, can create dysfunctional relationships between clients and the investment management service provider. Client-first values can suffer, and quite possibly, have struggled during the recent economic down-turn. As time goes on, rates do and will change, however a firm’s values should not. At Public Trust we have built our business on that very premise.
Don’t Manage Trust, Build It:
For the team at Public Trust Advisors, building trust, through long term relationships with our clients, is key in all that we do, and it permeates our deeds and words. Public Trust was founded to address a void we perceived in the fixed-income asset management services sector focused on investing public funds. Public Trust was started to create a renewed sense of commitment to do what we deem is right for public sector marketplace including state and local government’s clients and the assets that we manage on their behalf. We believe our actions and the fundamental foundation of our company points to a higher purpose that resides in our mission statement:
The Public Trust Mission Statement:
“To provide valued and trusted services to our marketplace in the manner we would serve ourselves and to create enduring bonds of trust between us and the clients we serve.”
We think fixed income asset managers have a duty to build a high-level of trust with their public sector clients. Here are ten easy steps to building trust between the investment service provider and public sector marketplace.
10 Steps to Building Trust with the Public Sector Investor
1) Transparency: Open dialogue. Alignment with your client goals and objectives.
2) Sincerity: Say what you mean, mean what you say.
3) Adding Value: Have your client’s interest at heart.
4) Respect: Treat your client as you would yourself.
5) Feedback: Welcome it, learn from it.
6) Consistency: Committed in words and deeds to your clients.
7) Responsibility: Mistakes happen, own them, learn from them.
8) Expectations: Be clear and honest as to what you can deliver.
9) Execution: Work to meet or exceed expectations.
10) Word is Bond: Promises made are promises met.
Trust, Demand It:
If you are a buyer of fixed income management services for the public sector, we believe that you are due a high-level of trust. Your fiduciary role in maintaining public funds is significant. Beyond that, only with trust can an optimal working relationship exist that creates complete alignment between the public funds client and the fixed income management services provider. It is the mutual trust between the client and the fixed income manager that provides the quality investment management services that the client should not only expect, but deserves.
Trust is not an option; it’s a long-term commitment to building value.