When Is the Right Time to Replace an Asset Manager?

Those who want to evaluate their financial advisor often look first at the performance achieved. But returns alone rarely tell the whole story.

An analytical perspective provides clarity

At Zwei Wealth, we regularly evaluate asset managers using our structured benchmarking process. Each asset manager receives an objective rating that takes into account factors such as performance, risk, investment style, costs, portfolio quality, and organisational changes.

• 3.3 to 5.0: Good quality, no immediate need for action.
• 2.7 to 3.29: The asset manager should be reviewed more closely.
• 1.0 to 2.69: Action is required.

The rating reflects how an asset manager is currently assessed. However, when deciding whether a mandate remains optimally positioned, we also consider a second factor.

Continuous Review Instead of Frequent Changes

In addition to the rating, we also consider the age of the portfolio in our analysis. This is illustrated in the Watermelon Chart .

A young portfolio with a good rating is in the green zone. However, if the rating remains unchanged over several years, the portfolio gradually shifts toward the red. Not because the asset manager has deteriorated, but because the market is constantly evolving and new, potentially more suitable solutions become available.

The Watermelon Chart helps identify the right time to reassess an existing mandate. A switch does not occur automatically, but only when an objective comparison shows that a better alternative exists.

Conclusion

The right time to replace an asset manager is not determined by declining performance alone. It’s when professional benchmarking shows that other solutions are now a better fit for the portfolio’s requirements. This is precisely the kind of transparency that Zwei Wealth’s manager benchmarking provides.

Would you like to know what professional manager benchmarking looks like in practice?

In the latest issue of Wealth Office Investment Committee, our experts walk you through the entire analysis process and explain how asset managers are objectively compared with one another.

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