Vendor Management: Get Great Service And Value From Every Service Provider

Asset owners and asset managers continue to look to external service providers to bring scalable and cost-effective solutions to complex investment management problems. As those relationships grow, so does the importance and complexity of vendor management. Creating a successful, multi-faceted governance model can give you some peace of mind. Having been in the investment management service and consulting business for more than 20 years, here are some of my lessons learned for successful governance of your vendor relationships.

Establish an "SLA" (service level agreement)

First, a client must agree on the measurement of success with its service provider. This may seem a "no-brainer," but I have encountered many clients who have no documented service standards with their major providers. Whether it be your custodian, an investment consultant, or a critical software vendor, the definition of success should not be a matter of perception. Clients should understand