When it comes to entrusting assets to a financial services firm, there’s a lot at stake. Consequently, the prevalence of the investment management RFP is at an all-time high. Indeed, countless investors trust the RFP process to improve their insight and help them find the right partner. Likewise, the financial services firms responding to investment RFPs use them to highlight their experience, service and past successes.

With this in mind, it’s clear that whether you issue or respond to investment management RFPs, it is essential to get it right. So, in this post, we’ll explore everything you need to know about the investment management RFP.

We’ll start with the basics of financial services and investment management RFPs. Specifically, we’ll cover the definition, why companies use them and various RFP names.

Next, we’ll walk through what you need to know when you’re issuing an investment management RFP. We’ll follow that with information about how to successfully respond to them. And finally, we’ll share a sample investment management RFP, issuing templates and examples. With these you can see what the process looks like in action.

Investment management RFP basics

Among financial services firms, requests for proposals (RFPs) are increasingly common. In fact, a recent survey reports 91 percent of asset managers say they struggle to meet RFP deadlines. While RFPs are normal in the financial industry, questions frequently arise.

What is an investment management RFP?

An investment management request for proposal (RFP) is a formal questionnaire sent to financial services firms by an institutional investor or potential client. Then, interested firms respond by answering the questions in a proposal format which helps the investor select the right partner.

Other names for investment RFPs

This kind of RFP falls into the financial services RFP category. Within the financial sector, investment RFPs go by many different names.

As with all RFPs, there are small nuances between RFPs with different names. However, you will also find a lot of overlap in their content. But, essentially, they all serve the same purpose ⁠— to detail and organize the exchange of the information required to complete an investment transaction.

If you’re a financial services firm trying to find RFPs, it’s important to keep in mind all the different names they may be called. In addition, remember to carefully read the RFP requirements, selection criteria and minimum qualifications to ensure you understand the scope of the request.

Why do investors issue RFPs?

As organizations and investors seek out partnerships to manage and grow their assets, they must consider a number of factors. Luckily, the RFP process provides a framework to make informed decisions. Indeed, it enables you to prioritize decision factors, outline complex requirements, ensure transparency and create side-by-side comparisons. Ultimately, both the investing organization as well as the prospective firms benefit from the RFP process.

Who issues investment management RFPs?

Generally, institutional investors create and issue investment management RFPs. These investors may act on behalf of a large organization, nonprofit or municipality. However, any organization with assets they wish to invest may benefit from exploring financial service providers using an RFP.

How to issue an investment management RFP

Writing an effective investment management request for proposal takes a combination of skills. Unlike other RFPs managed by procurement, the finance department typically writes and manages investment RFPs. For instance, portfolio managers, investment analysts or financial analysts usually create investment management RFPs.

Regardless of your title, if you need to manage an investment RFP, there are a few things you should know.

The RFP process for investment management RFPs

While each RFP is unique, they all use the same three-step process ⁠— RFP creation, administration and evaluation.

1. Creation

First, RFP creation includes defining the goals, requirements and priorities for the project. Next, using that information, write the RFP. Remember to include background information, objectives, RFP timeline, criteria and requirements.

Elements to include in your investment RFP
  • Company introduction
    • Overview – What does your company do?
    • Summary of needs – What are you looking for?
    • Project information – Who is involved?
  • Objectives for the engagement
    • Goals – What do you want to accomplish?
    • Scope – What are your specific needs and expectations?
  • Criteria
    • Minimum requirements – What are your deal breakers?
    • Evaluation criteria – How will the proposals be graded?
  • The RFP timeline
    • Deadlines – When are follow-up questions and the proposal due? When will you make your final selection?
  • RFP submission requirements
    • Format – How would you like to receive proposals? How long should it be?
    • Pricing table – What format should fees and charges be in?
  • RFP questions
  • Terms and conditions
    • Regulatory compliance – Are there any required government restrictions or certifications required?
    • Company compliance – What internal policies and initiatives may affect the firm?

2. Administration

Next, in the administration step, you issue the RFP you’ve created. But, before you do that, you must select which firms to include in the project. Once you’ve selected your suppliers and issued the RFP, you will answer any follow-up questions. And, as your deadline approaches, it is helpful to send reminders to firms that have not yet responded.

3. Evaluation

Now, the last step ⁠— proposal evaluation and final selection. Due to the complex nature of investment management RFPs, this step is often time consuming. To save time, refer back to your initial criteria.

Use the requirements gathered from your internal discussions to guide your evaluation. In addition, you may consider applying a weighted scoring approach to focus on the most important sections of your RFP. Indeed, this is particularly important when engaging stakeholders or a committee in the review process because it ensures everyone is on the same page.

When making your final decision, keep the big picture in mind. Which candidate has the best combination of experience, previous success and infrastructure? Remember, your review must be thorough and objective to ensure the best possible outcome.

Naturally, the RFP timeline above is highly simplified. To explore the RFP process in more detail, download the RFP process ebook.

RFP process guide cover

Things to remember when selecting an investment manager

  • Be as transparent as possible in your RFP. The more information you provide, the better quality proposals you will receive. If necessary, request a nondisclosure agreement.
  • Include customer success questions. The RFP is just the beginning of your relationship with this financial institution. What kind of engagement can you expect moving forward? How will success be measured?
  • Do a final gut check. Does the selected firm align with your organization’s goals and needs? Do they have a proven track record?
  • Consider potential risks. Is the firm compliant with company policy? Government regulations? Data security protocols? Free of any conflicts of interest?
  • Take your time. Your RFP may not have a clear winner, but don’t give in to temptation to rush the process. You may need to conduct follow-up interviews, send additional questions or request an RFP presentation.

How to respond to an investment management RFP

If you respond to investment management RFPs, you know that the competition is fierce. Each RFP sent by a potential client likely receives a dozen or more proposals from firms like yours. Therefore, the growth of your firm may depend on your ability to answer RFPs efficiently and successfully. So, how do you make your RFP responses faster and more compelling?

Faster RFP responses

In addition to receiving more RFPs and DDQs, they are also becoming more customized and complex. As this trend continues, you must streamline the proposal process to maintain momentum.

Leverage a knowledge library

Answering repetitive questions is a waste of time, both for you and your subject matter experts (SMEs). Consequently, one of the fastest ways to improve the efficiency of your process is to create an RFP response database for proposal knowledge management.

Sometimes called a knowledge library or knowledge base, this approach enables you to save past RFP response content in a centralized repository. Then, when you receive a new RFP, you can simply search for the best answer. Then, insert it into your new proposal and move on to the next item on your to-do list.

Notably, knowledge management is one of the most valuable elements of proposal software. In addition to making the process more efficient, you can leverage your centralized knowledge library to automate your proposals and save even more time.

Optimize your proposal management approach

When you receive a new investment RFP opportunity, what happens next? For firms that struggle to meet RFP and DDQ deadlines, the devil may be in the details of your proposal management approach. There are three ways to find optimization opportunities in your proposal process.

  1. Map your existing process
  2. Review previous RFPs
  3. Ask for contributor feedback

Examine each of these avenues to find insights and make any adjustments needed. Making minor changes to the planning and management of your RFP response process delivers a huge impact on your efficiency.

To learn more about proposal process management, explore the ebook: The proposal process guide.

Proposal Process ebook preview of cover and inside of book

Improve internal collaboration

Creating a successful response to an investment management RFP may require input from more than a dozen different people on your team. Consequently, efficient collaboration is crucial.

With so many firms vying for the same business, your SMEs can be a huge differentiator. However, they have a full workload of responsibilities outside of answering RFPs. Beyond using your knowledge library to answer previously-asked questions, centralizing your RFP process saves them time. RFP response software creates a single source of truth for the proposal process, where you can manage RFPs, create new content and request SME input.

Create better proposals

Only answer RFPs you can win

Here’s a secret that you may not know: Not only do you not have to answer every investment RFP you receive, but you shouldn’t. While you’re never going to win every RFP opportunity you respond to, you can quickly improve your win rate (not to mention lighten your workload) by being more selective.

Start by engaging your stakeholders when deciding to bid or not to bid. Ask yourself: Are you likely to win? Does your team have the capacity to give the response the attention required? Does the RFP seem like a genuine opportunity or a leverage point for the investor? All of these considerations should influence your decision.

Download this helpful checklist to guide your to bid or no-bid discussions.

Perfect your message

Check your RFP response for common mistakes that RFP evaluators often see as red flags:

  • Does the proposal follow the stated instructions? Is it complete?
  • From beginning to end, does the proposal make sense? Are there contradictions?
  • Does the content sound like your company? Does it use the right tone and terminology?
  • Is the content technically accurate? Are there grammar errors or style inconsistencies?

For more helpful tips about creating winning RFP responses, check out this infographic: 7 steps to creating winning RFP responses.

Ensure compliance

For financial service providers, compliance is key. Unfortunately, the increasing number and complexity of regulations makes it difficult to keep up. Inaccurate or outdated information in an RFP can ruin your credibility and disqualify you from consideration. Consequently, it’s important to engage your compliance team in the RFP response process. Establish a workflow that requires the approval of a compliance officer before submitting a proposal.

Sample investment management RFP, templates and examples

Starting an investment RFP from scratch is intimidating (and unnecessary). To get a head start on your next RFP, check out these helpful investment management RFP samples and templates.

RFP for an investment advisor examples

If you’re struggling to fill in the blanks. These real-world examples will help you picture your final investment management RFP.