Asset holders should...


1. Recognise that they are in a position of trust managing client money and should act at all times in the best long-term interests of their clients, informing them of possible conflicts of interest and avoiding these wherever possible.

2. Operate within a culture of open dialogue with beneficiaries – building an agreed understanding of investment objectives and risks.

3. Provide information to beneficiaries, including information on investment performance, in a way which is clear, timely, useable and relevant to clients’ investment objectives.

4. Be proactive in setting mandates for asset managers based on open dialogue about agreed investment objectives.

5. Set mandates which focus managers on achieving absolute returns in line with beneficiaries long-term investment objectives, rather than short-term relative performance benchmarks.

6. recognise that diversification is the result of diversity of investment styles.

7. review performance no more frequently than is necessary, and with reference to long-term absolute performance.

8. encourage and empower asset managers to engage with investee companies as a means of improving company performance to deliver investment returns.

 

Read the next section:
Good practice guide for Asset Managers

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