Magazine article University Business

Managing Financial Services Relationships: Finding the Right Provider Is Not Rocket Science. Rocket Science Is Easier. (on the Money)

Magazine article University Business

Managing Financial Services Relationships: Finding the Right Provider Is Not Rocket Science. Rocket Science Is Easier. (on the Money)

Article excerpt

The range of relationships that business officers maintain is truly amazing. Investment managers touch the endowment, operating reserves, and cash. Lenders and guarantors shape the financing of the institution. Insurance brokers help with risk. The effective management of these relationships goes a long way toward defining the quality of life for the business officer.


Finding the right financial services provider for your school starts with remembering who is in the driver's seat. Simply put, look for a provider that:

* wants to Learn about the clients' needs first

* communicates proactively

* understands that a successful client is a win-win

Unfortunately, too many service providers talk before they listen. A pitch such as, "Let me tell you how we have successfully lowered the cost of borrowing for a hundred institutions" may convey enthusiasm, but it does little to place the service in the client's world. Likewise, there are investment managers who attempt to open a provider/client dialog by stating, "We've earned X percent over the past three years." A simpler introduction--followed by a series of gently probing questions--forms a much better foundation. For example, a financial services provider on your short list to assist with funding might ask the following:

* What are the circumstances of your current borrowings?

* Do you anticipate additional expansion that will require funding?

* What are some of the features of your current program that work particularly well for you?

* What's not working?

When a financial services provider asks those types of questions--and actually notes the answers--your probability of getting the right service increases.


There's a reason why they're called financial services providers: Once the business is in place, service must be the story. You should receive:

* all necessary communications in an accurate and timely manner.

* more than the minimum of communications.

Furthermore, a good service provider will:

* anticipate what you might need before you ask, without overburdening you. (Masses of data or documents are not the same as communication.)

* know when to back off. Some investment managers try to impress clients with their performance in products that don't logically play a role in the client's particular portfolio. Such a manager is not the right one for you. Conversely, if your investment manager says, "This fund isn't right for your institution's portfolio at this time," you'll know you've landed a truly capable provider. He or she may go on to explain that there could be opportunities in the future where such an investment will be appropriate; you'll have more confidence in that decision with such a manager.

* answer questions promptly and professionally. It is when you are in need, especially, that the value of your provider will be most obvious.


The responsibility for a strong client/provider relationship is not solely the province of the financial services provider. Here's what you can do to ensure a strong working relationship:

Make your expectations clear. The biggest obstacle to effective relationship management is incomplete communication. If the vendor is good at asking questions, the discovery process can go smoothly, but it takes effort on both sides. …

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