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“People who are not in boutiques can feel frustrated,” says McAlpine. “Many crave the link
between assets under management or performance and pay. They want to feel they are directly rewarded for what they do.”

Conversely, in large established companies employees have little control over corporate activity. “Any high level activity causes unrest,” says McAlpine. “In mergers you don’t know who the new owners will be and what new directions they will take. If the investment style
is changed it may not suit some investors. For instance, some love running retail assets
while others hate it.”

The boutique can be the perfect environment for people who have known each other for
years and know each others’ strengths.

But a working environment that meets the joint aims of good performance and investor
happiness can be created just about anywhere, says Amin Rajan, chief executive of Create, a research consultancy. He has identified the following three factors as being vital in attracting, retaining and getting the best out of talented managers.

These are:
• An employer brand that generates a high degree of corporate pride.
• An interesting job that stimulates personal commitment.
• A balance of hard and soft incentives.

McAlpine adds corporate stability to the list. She says there is nothing worse for most
employees than frequent sweeping reorganisations that attempt to take advantage of every passing business and investment fad. Some industry insiders believe, for example, that the rush to develop liability-matching investments for pension funds is a mistake, and that fund management companies have overestimated the fees that can be generated from such products.

“These things can quickly come full circle,” says McAlpine. “You should stick to your guns as
an organisation.”

So all things considered, stability and continuity would appear to be in the best interests of investors, as long as they don’t lead to stagnation. This begs a wider question: do your fund
managers keep faith with their method? Do they have the intellectual capacity to demonstrate its long term viability and the guts to stick with it when it’s under pressure?

Any investment style will go through periods of underperformance. If it worked all the time,
everyone would use it – thereby it would cease to work. So when the headhunters and consultants have all had their say on the mobility question we’re left with an inescapable fact. Managers will change their jobs as often as they like and that’s problematic enough. But when they change their minds with the same frequency – that’s another problem entirely