Re: “Papers question worth of consultants,” Pensions & Investments, page 2, Sept. 30.
These are not the first studies to document the failure of financial consultants to pick good managers, and they won't be the last, unless the consulting profession steps up its game. Always change a losing game.
Years ago, Frank Sortino and I wrote in P&I (Sept. 16, 2002) about improving investment manager due diligence. We argued that the evidence did not support the theory so it was time to change the theory. No one listened.
Perhaps a different perspective will help. Professional investment managers are in fact professional gamblers. Gamblers must assess risks, deploy assets accordingly and compete against other professional gamblers. Do you really think you should use indexes and peer groups to pick a professional gambler? You could, but you'd probably lose. The evidence supports this view — old obsolete performance evaluation approaches do not pick winners.
There are new and improved tools to increase the odds of choosing a gambler who will win in the future. I've written a white paper to help, at http://www.ppca-inc.com/pdf/Minding-Ps-and-Qs.pdf. Are you ready to play to win?
RONALD SURZ
President
PPCA Inc. and Target Date Solutions
San Clemente, Calif.
