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Award Classes
PAM Awards cover two main categories:
Affluent: for client portfolios of less than £1 million; and
High Net Worth for client portfolios of £1 million or over.
Overview of Methodology - Affluent
In the Affluent Class the PAM Survey charts the collective views of the private client advisory community as to who the leading private client investment managers are. This can only be achieved by adopting a coherent methodology, which genuinely reflects market sentiment.
Order of Merit
The PAM Awards Programme in the Affluent class features three classes of the leading managers in each Award category: nominated, shortlisted and winner.
The Voting Process
We send written questionnaires to the leading firms involved directly in dealing with private client investment management firms, including trust companies, law firms, accountancy practices and independent financial advisory firms. We undertake that the individual responses are kept strictly private and confidential and that there is no corporate or personal attribution.
PAM Award Categories
The aim of the Awards Programme is to gather market data on the relative performance of the leading private asset management firms, including private banks, fund managers and stockbrokers.
We ask the respondents to name the top managers whom they believe to be the best in each of the categories below on the basis of specific criteria (as shown in brackets):
- Investment Performance: Defensive Portfolios (Criterion: the institution that has, as a whole, most consistently met or outperformed benchmarks set for clients for defensive investment mandates over the past three years)
- Investment Performance: Balanced Portfolios (Criterion: the institution that has, as a whole, most consistently met or outperformed benchmarks set for clients for balanced investment mandates over the past three years)
- Investment Performance: Growth Portfolios (Criterion: the institution that has, as a whole, most consistently met or outperformed benchmarks set for clients for growth investment mandates over the past three years)
- Investment Performance: Specialist (Criterion: the institution that has, as a whole, most consistently met or outperformed benchmarks set for clients for any mandate not covered by 1, 2 or 3 over the past three years)
- Quality and Clarity of Reporting (Criterion: the institution that has most consistently provided the most regular, comprehensive and clear client account reports)
- Product and Service Range (Criterion: the institution whose range of products and services have most completely matched your clients' needs)
- Image & Reputation (Criterion: the institution whose marketing activity has made the most positive impression on you in the past twelve months)
- Overall Service Quality (Criterion: the institution that has offered the best overall service, covering - inter alia - administration, relationship management, accessibility and product delivery)
Unprompted Votes
Where a vote is cast by a respondent, it is on an unprompted basis. Tru-Est validates all votes cast by verifying the activities of the manager who has been voted for. In addition each respondent is asked to provide supporting comments to add anecdotal feedback to the vote.
Response Rate and Survey Coverage
This year responses were collected from 106 organisations. These responses were broken down as follows:
By gathering data on the number of high net worth clients and the value of the assets advised on overall by respondents, we obtain a clear picture of the size of the asset pool represented by the Survey. Taking the median values from each respondent this year, the total asset pool covered by the 2002 Survey stands at around £32 billion, more than 10% of the UK market total of around £300 billion (source: PAM 2001).
Weighting of Votes
A cornerstone of Tru-Est’s methodology has been to pioneer weighting, both of respondents and of managers. Respondents’ nominations are weighted to match the size of their client base. So, for example, a respondent with a client base worth £50 million in assets carries one tenth of the voting power of a respondent with £500m in assets. Points are awarded to the nominated managers in the Affluent Class, based on the value of each respondents’ client base and the element of this that relates to clients whose portfolios fall within the criterion set.
In order to level out the playing field between large managers and small, each weighted voting score is divided by the nominated manager’s private client assets under management figure, as featured on the PAM database. Thus the final - or net - points score is calculated. In other words, the PAM Awards winners are the managers who genuinely carry the greatest voting points score per pound in private client assets managed.
Overview of Methodology - High Net Worth
Order of Merit
The PAM Awards Programme in the High Net Worth class again features three classes of the leading managers in each Award category: nominated, shortlisted and winner.
PAM Judging Panel
Given the greater sophistication and demands of high net worth investors, manager evaluation is carried out via a panel of leading experts who combine their market expertise to deliver a combination of quantitative performance attribution analysis with their experience of live client portfolios held with managers in the market.
In this class the private asset management firms enter themselves for individual award categories via the completion of an exhaustive questionnaire, including 99 questions across nine subject areas, encapsulating: group structure & personnel; investment management process; banking, custody and controls; regulation and investor protection; investment performance; fees, charges and interest; reporting and instructions; and conflicts of interest disclosures.
All manager entries delivered by the deadline are presented to members of the Panel, initially in four groups or “pools”. Each entry in each pool is examined by three of the Panel members, who individually make a determination as to whether the manager’s entry should be nominated for the second stage of the selection process.
Entries that carry at least two out of three Panel members’ nominations in each Award category are then put forward for judging by all members of the Panel. There is no pre-determined number of entries that move forward to the second stage in each Award category and entries are evaluated purely on merit.
Each Panel member is sent a list of the nominated contenders for each Award category in alphabetical order. Each Panel member then ranks these managers in ascending order of their individual preference, with 1 as the highest rank.
All of the Panel members’ votes are then returned and computed, by combining scores for each manager entry to establish an average. The managers are then placed in order, starting with the lowest average score (the highest ranked firm).
This list is then presented to the Panel in closed plenary session. The Panel debates the respective merits of the nominated firms and determines the (unlimited) number of managers to be shortlisted for each Award category.
The Panel then discusses and evaluates the shortlisted managers, from which it chooses a winner in each Award category.
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