Hello Ilir,

First, thank you for taking the time to share your thoughts. I really appreciate your providing an in-depth response to the article.

Next, I think you are correct that managing expectations between client and manager is a critical issue. This is the critical piece of advice to have in place before negotiating for assets with a client. I think in the current era of investing most money managers find themselves having already painted themselves into a corner. One problem is that most money managers (in terms of numbers of money managers, not in terms of as measured by total AUM) are at least one step removed from the client. Also, as I described in my piece many believe that it is impossible to turn their nose up at the measures I describe, and to simultaneously satisfy the consultants that evaluate them with these measures. Lose the measures, then lose the consultant, then lose the client, then lose the assets, then lose your scale. Few are willing to risk such a conversation.

I will share with you a comment I received from a CIO about this person's firm and maintain their anonymity, "As expected, I do not find the [alpha-generating] material useful in my career currently. Investment decision-making is so constrained. The amount of time commitment necessary is difficult to justify for what is essentially 'two worlds colliding.' This program coaches you to earn alpha by thinking out of the box, whereas advisors, fund manufacturers, regulators and your clients require you to stay in the box."

Sadly, in my many conversations with asset managers their choices have resulted in little ability to manage expectations with clients.

Please keep those comments coming!

Yours, in service,

Jason