How can we evaluate our portfolio manager's performance?

Dagliago

I am a trustee of a small charitable trust. Our assets our managed by a portfolio management company on a discretionary basis.
How do we know how good a job they are doing?
They send us regular valuations with performance figures. But how should we interpret these?
The performance may look okay compared to the benchmark they use, but how do we know how appropriate the benchmark is, or that another manager wouldn't do even better?
How can we compare their performance to other management companies?
This must be a common question facing anyone entrusting their money to discretionary management, not just trustees. But I have found very little unbiased guidance online.
Do we need to employ an independent consultant to give us an annual assessment of our portfolio management company?
Who would that be - an independent financial advisor?
Or are there figures published somewhere which compare portfolio managers' performance?
Any thoughts anybody?

dunstonh

I am a trustee of a small charitable trust. Our assets our managed by a portfolio management company on a discretionary basis.
How do we know how good a job they are doing?

Either you assess it yourself or you use an IFA.

They send us regular valuations with performance figures. But how should we interpret these?

By analysing the returns , the underlying assets and comparing them to similar weightings elsewhere to the same risk level.

The performance may look okay compared to the benchmark they use, but how do we know how appropriate the benchmark is, or that another manager wouldn't do even better?

It is a regulatory requirement that benchmarks are suitable.   you never know in advance how a portfolio is going to perform.    What you do know is that they will always be better options with hindsight.

Do we need to employ an independent consultant to give us an annual assessment of our portfolio management company?

An IFA is the adviser to the investor (in this case the trust).  If you do not employ an IFA then you need to do it yourself.   Otherwise the portfolio will just remain as it is.

DireEmblem

How do we know how good a job they are doing?

Do you have the background of their appointment, and the targets set?  
Are those targets still aligned with your goals, and if so, then you can determine if the benchmark, and thus their performance is meeting expectations or not.