Philadelphia partner Josh Deringer was quoted in a recent Board IQ article, titled, “Cheaper Fund Subadvisers Can Save Money, but for Whom?" The article discussed subadvisor turnover and how boards should pay particular attention when a new subadviser agrees to do the work for less than the departing one – making sure to ask for a detailed explanation if the primary adviser proposes to keep all or part of the savings instead of returning the money to the fund.

“At other complexes, the default position can be just the opposite, with any savings from a subadviser switch going to the primary adviser,” said Josh.

He continued, “In most cases, it’s not going to go to the fund.  It’s going to result in greater profitability to the adviser unless the board prevents that from happening.”