Most investment management companies that exist today consider a Request for Proposal (RFP) the foundation of their due diligence process when researching an investment strategy. Investing time in creating a Sample RFP that you can provide to clients and prospects will significantly cut down on the time you have to dedicate to completing every RFP individually. Because this is such a critical phase of information gathering, you want to make sure you have all your questions outlined and ready to go, so that nothing is missed in the process. It can seem overwhelming, but the trick is to have a guide for every time, so it’s worth the investment of time up front. 

    To help get you started, we put together what we’ve found to be a list of the top 80 questions you need to answer when creating a Sample RFP.

    1. 1. Describe your firm and its history, identifying founding members and discussing historical changes in structure, if any.
    2.  
    3. 2. What is your current ownership structure and how has it changed over time? List significant stakeholders and their percentages of ownership.
    4.  
    5. 3. Are there any anticipated changes to your current ownership structure?
    6.  
    7. 4. Provide details on succession planning for key personnel at the firm.
    8.  
    9. 5. List the location, team size and function (e.g. investments, sales, client service) of the firm’s office(s). 
    10.  
    11. 6. Attach a current organizational chart that includes all relevant senior management/operations personnel and provide biographies for each of your key professionals. 
    12.  
    13. 7. Please list major firm level personnel changes (investment and non-investment) over the past five years. Include name, title, date and reason for the change. 
    14.  
    15. 8. What is the current compensation structure of the firm, including both investment and non-investment professionals?
    16.  
    17. 9. Is there a designated career path for an Analyst? Can an Analyst become a Portfolio Manager?
    18.  
    19. 10. Describe your current team structure. How many investment professionals do you have?
    20. How long has the current investment team managed the strategy?
    21.  
    22. 11. Are there any plans to expand the team over the next 5 years?
    23.  
    24. 12. Has the firm been profitable for the current and prior fiscal year? What is the breakeven asset level of the firm?
    25.  
    26. 13. Does the firm currently or historically have any debt or credit facilities? If so, please provide the terms, how they are being used, and the amount utilized.
    27.  
    28. 14. Describe the firm’s insurance coverage. 
    29.  
    30. 15. What is your firm’s plan for growth over the next 5 years?
    31.  
    32. 16. Have you had to shut down or liquidated any strategies or products in the last 5 years?
    33.  
    34. 17. Describe any new products your firm has launched or registered in the past 12 months.
    35.  
    36. 18. Comment on any plans for additional new products. 
    37.  
    38. 19. Provide your firm’s mission, vision and values. Describe the firm’s culture. 
    39.  
    40. 20. What are your firm’s current total assets under management and historical assets under management by year, for the past 10 years? 
    41.  
    42. 21. For the specific strategy under consideration, please provide a five-year history of the strategy’s AUM and the number of accounts invested in the strategy. 
    43.  
    44. 22. Have you experienced any significant client terminations in any products at the firm (significant can be defined at 15% or more of a product’s assets)?
    45.  
    46. 23. Please provide a breakdown in terms of assets under management by your firm’s respective client base (e.g. corporate, public, endowments/foundations, etc.).
    47.  
    48. 24. Can you please list your five largest clients? Provide the name or type of client and the dollar amount.
    49.  
    50. 25. Does any one client represent over 10% of the firm’s overall assets? If so, what percentage does this client represent?
    51.  
    52. 26. On what platforms is your strategy available?
    53.  
    54. 27. What is the strategy’s objective?
    55.  
    56. 28. Describe your management style as it applies to your strategy (e.g. bottom-up, concentrated, value oriented). 
    57.  
    58. 29. Describe your investment philosophy for this strategy. Include your approach to security selection, market capitalization range, sector/industry, and country/region weights.
    59.  
    60. 30. Describe the strengths of your firm. How do you differentiate yourself from other investment managers?
    61.  
    62. 31. What is your official benchmark? Has your benchmark ever changed overtime – if so, how and why?
    63.  
    64. 32. Describe the security universe covered by your research.
    65.  
    66. 33. Describe, in detail, the various stages leading to stock selection. 
    67.  
    68. 34. How are investment decisions made? 
    69.  
    70. 35. Provide the minimum and maximum sector allocations for the portfolio.
    71.  
    72. 36. What is your policy on holding cash? Historically, what have cash levels been?
    73.  
    74. 37. What is your policy on investing in international securities? Have there been any changes to this policy?
    75.  
    76. 38. Describe the economic conditions where you’d expect your investment strategy to outperform the market? Then conversely, when would you expect it to underperform?
    77.  
    78. 39. Do you have a formal Investment Committee? If so, please discuss its role and function in the investment process. 
    79.  
    80. 40. Explain your sales process in detail.
    81.  
    82. 41. What is the expected holding period for an investment? 
    83.  
    84. 42. Does this strategy use leverage, derivatives and/or short? If yes, please describe.
    85.  
    86. 43. Provide an overview of your research process. 
    87.  
    88. 44. Do analysts specialize by sector, industry or country or are they generalists?
    89.  
    90. 45. What is the importance of internal versus external research? How do you use each?
    91.  
    92. 46. Are company visits an important part of your research process?
    93.  
    94. 47. Describe the level of investment in the strategy as it relates to your key professionals. 
    95.  
    96. 48. List and discuss the current sector weightings of the portfolio and the rationale for any significant over/underweight. 
    97.  
    98. 49. Describe which portfolio holdings and/or sectors were meaningful contributors or detractors to performance over the past quarter. 
    99.  
    100. 50. What is the average number of names held in the portfolio? Has this changed over time? If so, why?
    101.  
    102. 51. What has the portfolio turnover been in the last five years? How does the investment process impact turnover and under what conditions do you expect turnover to increase or decrease?
    103.  
    104. 52. Is tax efficiency considered when managing this strategy?
    105.  
    106. 53. Discuss the fees and investment minimums for the strategy and all available vehicles (mutual funds, SMA etc.). 
    107.  
    108. 54. What is the capacity for this strategy and how is it determined?
    109.  
    110. 55. Who is responsible for monitoring and measuring risk, and are they independent from the strategy’s investment team?
    111.  
    112. 56. Describe how risk management is embedded in the investment process and discuss the specific role of the portfolio manager in the risk management process. 
    113.  
    114. 57. How often are risk management reports reviewed? 
    115.  
    116. 58. How is liquidity monitored? Discuss how liquidity could be impacted under certain scenarios such as unusual market events. 
    117.  
    118. 59. How long will it take to liquidate the portfolio?
    119.  
    120. 60. Describe the structure of your compliance department and your compliance procedures currently in place. What is the reporting line for your compliance department?
    121.  
    122. 61. Have there been any changes to your compliance policies and procedures related to personal securities trading, code of ethics, trading, brokerage, soft dollars, risk management and data security?
    123.  
    124. 62. Does your firm use soft dollars?
    125.  
    126. 63. Who oversees the trading and reconciliation functions? To whom does this person report?
    127.  
    128. 64. Who has authority to initiate trades? How much latitude are traders given when placing an order?
    129.  
    130. 65. Describe your policies concerning trading, trade rotation and best execution.
    131.  
    132. 66. What is your trade error policy and procedure?
    133.  
    134. 67. What are your policies and procedures for personal trading?
    135.  
    136. 68. What policies and procedures are in place to ensure compliance with current regulations on proxy voting?
    137.  
    138. 69. Is there, or has there ever been any criminal, civil or administrative proceedings against the firm, its investment vehicles or any of its principals?
    139.  
    140. 70. Is the firm registered with any regulatory agency?
    141.  
    142. 71. When was the firm’s last audit/examination by any of these regulatory bodies? Did you receive any deficiency letters as a result of the examination? If so, please summarize the deficiencies noted and how the firm responded.
    143.  
    144. 72. Provide the name of the firm’s auditor, legal counsel and custodian (if applicable). Have any of these relationships changed since the firm’s inception?
    145.  
    146. 73. Who is responsible for pricing and valuation for the product?
    147.  
    148. 74. Is your firm in compliance with GIPS standards? If so, how many years has your firm been in compliance? Has the firm even been verified for GIPS compliance and/or the composite being examined?
    149.  
    150. 75. Please list the key systems that your firm utilizes for the following functions: (1) customer relationship management, (2) trading and reconciliation, (3) fund accounting, (4) portfolio management, (5) risk management, (6) compliance, (7) network security. 
    151.  
    152. 76. Please describe your technology and infrastructure team. Who leads the technology operations and to whom does this person report?
    153.  
    154. 77. Describe your firm’s data protection and Cybersecurity policies and practices. 
    155.  
    156. 78. How do you address Cybersecurity in vendor management?
    157.  
    158. 79. Describe your backup and disaster recovery plans. When was the plan last tested and what were the results of the test? Was the plan modified as a result of the test?
    159.  
    160. 80. How long would it take for normal operations to resume after an incident is triggered?

    Sample RFPs can not only be used as an effective marketing tool, but can also be big time savers throughout the due diligence and investment research process. We know that right now, things are more in flux than ever, and have put together a secondary guide to keep you on track as you move through the RFP process: ESG, D&I and the Pandemic: How these topics are quickly becoming the most commonly asked RFP questions.

    Feel free to reach out to me with any questions or further clarification on the suggestions mentioned above, I’m happy to talk through this process with you. I can be reached at (610) 620-5384 or trogers@dakota.co.

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