Telling Good Consultants from Bad
demonstrate some aptitude. Furthermore, the education,
experience, credentials, sophistication, and cost-effectiveness
are also worthy of consideration.
Simply having the criteria is not always enough to make a
decision. For instance, you may have a clear understanding
of your consultant’s costs, but you might not know how that
compares to peers. Similarly, it will require some research
upon your part to truly determine if the consultant being
used has really selected a fair index to benchmark their
performance against. You may see a number of credential
designations behind the key consultants—AIF, CRPS,
MBA, CFA, CIMA, QPFC, CFP—but which are most
valuable to you?
If you feel unqualified making these types of judgments, it
might be in your best interest to hire a separate consultant for
the sole and exclusive purpose of vetting other firms. This
arrangement might seem like an unnecessary complication,
but the additional level of scrutiny is actually quite common.
A key aspect of demonstrating prudence in any endeavor is
comparison to peers, and without a thorough understanding,
an uninformed comparison can be damagingly misleading.
Consultants are often called upon to benchmark the service
providers common to institutions—like lawyers, actuaries,
accountants, recordkeepers, and custodians - and to provide
an opinion on the relative costs and services they provide.
Asking for a consultant to run a peer-driven consultant
benchmarking can be a valuable exercise and provide superior
matching of client needs to consultant capabilities.
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