Frontier Advisors has re-established itself as the clear leader of the pack among asset consultants in the annual Peter Lee Associates survey of institutional investors. The firm won eight out of 12 categories plus the top ‘relationship strength index’ (RSI) position, which is a combination of the main categories.
The history of the Peter Lee survey – which represents the sole remaining annual consecutive study of asset consultants in Australia (apart from Chant West’s implemented consulting survey) – shows an interesting trend which may mirror the fortunes of the consulting firms themselves.
Basically, Frontier regularly won the RSI in the several years prior to about 2010, when rivals JANA Investment Advisers and what is now Willis Towers Watson, regained prominent positions. The following year, Frontier hired a dedicated chief executive, Damian Moloney, which allowed the firm’s main consultant, Fiona Trafford-Walker, to concentrate on investment strategies for clients.
Moloney introduced a number a business disciplines to the firm, and, importantly, embarked on the development of a global research co-operative (called GIRA) and a major technology build which has resulted in a new data product series (the Partners Platform) which can be self-administered by clients or used on a standalone basis.
The firm weathered some senior staff losses, mostly to client funds, including that of its former deputy chief executive, Kristian Fok, and grew its numbers through a mix of organic promotions and recruitment from rivals, such as Mercer.
While the past year has seen several successes in terms of new clients such as AvSuper, LUCRF, the Gardiner Foundation and MAV Insurance, and new standalone clients of other consultants for its Partners Platform service, Frontier is about to undergo a new change at the top.
Moloney resigned late last year and has subsequently taken up the new position of European investment manager for AustralianSuper, to be based in London. The latest Peter Lee honours, in a sense, represent a tribute to his success.
He will be replaced next month, after a search, by Andrew Polson, an experienced financial services professional who most recently headed up wealth management for Tasmania’s My State bank.
Peter Lee doesn’t reveal much detail about its survey. But it is understood that, last year, JANA was equal first with Frontier in the RSI position. This year Frontier is sole leader on that measure.
Kim Bowater, who is acting chief executive at Frontier, said last week: “We have been resolute in our focus to deliver an evolving set of services to match investors’ changing needs and to ensure our interests are aligned with our clients’ interests, and those of the people they are ultimately investing for. Our ownership model and commitment to independent advice means we can concentrate simply on delivering our best investment ideas to clients, and the highest quality of advice. It is reassuring that the market has seen value in this approach.”
Frontier is owned by a group of big industry funds and is the only major consulting firm which does not sell product, in terms of funds or implemented consulting products.
The Peter Lee results were backed up by investor behaviour, Bowater said. In a sector where new business wins could be rare, in the last 12 months Frontier had been successful in gaining a long-term appointment from four new clients, with four others subscribing to its technology platform and a further 10 investors commissioning them for project engagements, she said.
Peter Lee studies, such as the asset consultants one, involve surveys of a particular industry segment’s major customers and tend to have little qualitative input.
Greg Bright is publisher of Investor Strategy News (Australia)