The three-firm global alliance for information sharing by Frontier Advisors has been expanded to include sharing information and views on business issues. The alliance is to be widened to include Asia and Japan, South America and, eventually, South Africa.
Fiona Trafford-Walker, Frontier’s investment director, was in New York recently for what has become a six-monthly meeting specifically on the business of consulting with the alliance partners, Segal Rogerscasey from the US and Lane Clark & Peacock (LCP) from the UK.
She said in a video interview with a local publisher, CIO magazine, that the latest discussions involved, for example, databases and how they could be made more accessible to clients.
Originally the alliance – Global Investment Research Alliance (GIRA) – was expected to concentrate on manager research, but it has evolved to include asset allocation, other investment research, capital markets and the exchange of business ideas.
Trafford-Walker, who last year notched up 20 years at Frontier, reiterated that the firm had no interest in going down the implemented consulting route, which in the US and UK is generally called outsourced CIO (OCIO).
“We have always thought independence is important. We want to be seen to be able to sit around the table with trustees or directors of any investment pool and for them to be totally certain that we’re on their side, that we have nothing that would make us recommend a particular investment or product,” she said.
“Plus in Australia there are a lot of new requirements on the level of care and fiduciary duties for clients and we think independence fits neatly with that.”
She admitted that it was “much easier” from a commercial perspective to provide implemented consulting services but Frontier had no interest in doing so. Instead it hoped to evolve with and remain relevant to its clients in other ways, such as providing more high-level and strategic services.
GIRA was helpful with the increasing size and sophistication of super funds, especially the industry funds which are Frontier’s core client base.
“Australian investors tend to think globally anyway, even if their assets are heavily weighted to Australia,” she said. “Often that’s for tax reasons… but increasingly they’re investing overseas and travelling overseas. We have an extensive travel program, too, and we now have two more windows to the world.”
The performance of Australian implemented consultants came under the spotlight recently with the publication of the results of a study by Deloitte. As previously reported, the study showed a mixed level of value add from the six firms studied, with evidence that whatever added value was gained from good manager selection tended to be lost in asset allocation decisions.
Trafford-walker said that Frontier was doing research and due diligence on potential GIRA partners in Asia and Japan, while SegalRogerscasey was doing the same thing in South America. She said the ambition was to also have a South African connection down the track, for truly global representation.