Why Relationships Matter in Institutional Consulting
Managing money at scale is about more than spreadsheets. Institutional consulting deals with pensions, endowments, foundations, and family offices. These clients control billions. They rely on consultants not only for returns, but for trust and guidance when markets shake.
Strong relationships are the backbone of this work. Markets rise and fall, but trust must remain steady. Without it, even the best investment strategy can fail.
Beyond the Numbers
Listening First
The first skill of a good consultant is not forecasting. It is listening. Institutions have unique missions. A pension fund focuses on retirees. A university endowment funds scholarships. A foundation supports its community.
An advisor once described meeting with a university board where members disagreed on priorities. Instead of pushing a portfolio model, he asked each member to explain what “success” meant to them. That conversation shifted the meeting. They discovered common ground: protect the capital first, then grow responsibly. Listening built alignment before numbers ever came into play.
Trust Through Transparency
Clients want clarity, not jargon. Consultants who explain risks and fees openly build credibility. A study by CFA Institute found that 87% of institutional investors rank “trustworthiness” as the top trait they want in advisors.
When a foundation questioned why its portfolio lagged in a bull market, the consultant explained the trade-off: less upside in exchange for protection during downturns. The board appreciated the honesty, even if it meant explaining underperformance.
The Role of Emotions in Market Cycles
Fear in Downturns
When markets crash, emotions run high. Boards face pressure from stakeholders. Consultants must balance logic with reassurance.
During the 2008 crisis, many institutions panicked and considered selling. One consultant told the story of a board member pacing the room, saying, “We can’t lose any more.” The consultant walked through the long-term plan, showing past cycles where patience paid off. The board held steady. Years later, they were glad they stayed invested.
Overconfidence in Booms
The opposite happens in bull markets. Clients want to chase returns. Consultants must remind them that markets do not rise forever. Caution in good times protects against regret later.
In 2020, after tech stocks soared, one endowment wanted to double its exposure to growth companies. The consultant recommended trimming instead. Months later, when tech corrected, the board saw the value of that restraint.
Building Relationships That Endure
Personal Connection
Institutional consulting is still about people. Boards, committees, and families want to work with advisors they trust on a personal level. That trust is built in conversations, not just reports.
One advisor always starts meetings by asking about the client’s organisation, not the portfolio. He wants to know what challenges they face outside the numbers. That small gesture builds loyalty. Clients know he cares about more than performance.
Consistency Over Time
Consistency builds trust across market cycles. Showing up at every meeting, providing regular reports, and following through on commitments matter. Trust fades quickly if clients feel forgotten.
Youssef Zohny has often noted that institutions who succeed through market cycles are the ones who rely on consistent, disciplined consulting processes. That steadiness creates confidence, even during uncertain times.
Actionable Recommendations
1. Start With Mission Alignment
Ask clients what success means for them. Frame strategies around their goals, not around abstract benchmarks.
2. Communicate Simply
Avoid jargon. Use clear language, charts, and real examples. Clients remember stories more than equations.
3. Prepare for Emotional Shifts
Create a playbook for bull and bear markets. Know how to talk clients through both fear and greed.
4. Be Transparent on Fees and Risks
Hidden costs or vague explanations destroy trust. Be clear about how consultants are paid and what risks exist.
5. Invest in Relationships, Not Just Portfolios
Take time to know the people on the other side of the table. A strong personal connection often matters more than short-term performance.
Lessons From Market Cycles
2008: The Value of Patience
Institutions that sold during the crash locked in losses. Those that trusted their consultants and stayed invested recovered stronger.
2020: Flexibility Wins
During the pandemic, consultants who had prepared liquidity plans helped institutions meet obligations without panic selling. Those without plans scrambled.
Inflation Era: Communication Counts
In 2022, inflation shocked many boards. Consultants who explained how real assets and infrastructure could protect portfolios gained credibility. Clear communication turned fear into strategy.
The Future of Institutional Consulting
Markets will keep changing. Inflation, interest rates, and geopolitics will create new challenges. But the human side of consulting will remain constant. Trust, transparency, and empathy will always matter.
Technology can support reporting and modelling. But no tool can replace the reassurance of a trusted voice in a crisis. Institutions want consultants who balance analytical skill with human understanding.
Final Thoughts
Institutional consulting is about more than asset allocation. It is about guiding people through uncertainty. The strongest consultants know that numbers alone do not win trust. Relationships built on listening, transparency, and consistency carry institutions through market cycles.
For consultants, the lesson is clear: focus as much on people as on portfolios. Markets rise and fall. Trust, once built, can last for generations.
