11 MAY 2018
RICS standards and guidance help RICS professionals in the way they conduct business, both professionally and ethically. While important, I believe the usefulness of these standards go beyond personal application.
For my company, DEKA, one of world’s largest savings and investment banks based in Germany, I am participating in a large outsourcing project, where up to a level of strategic asset and property management tasks, an external one-stop-shopping service provider is sought. We started with one of the four asset classes the bank invests in, logistics and light industrial.
Searching for a single global external service provider raised questions on how to manage this external party with a small group of internal asset management controllers and analysts. One needs to find a framework of cooperation. Giving management of portfolios with a value of several billion euros away without a clear system of agreements, conditions and a satisfying fee settlement structure for the external service provider has been a challenge.
Giving management of portfolios with a value of several billion euros away without a clear system of agreements, conditions and a satisfying fee settlement structure for the external service provider has been a challenge.
Enter RICS professional statements and guidance. Heading this project together with a German RICS professional, we found that combining DEKA’s strong internal corporate governance, compliance and performance requirements with RICS requirements, resulted in the highest professional outsourcing standards and skill-set.
Specifically, we made use of the RICS professional statements on real estate management and on conflicts of interest, as well as of its guidance notes, including property asset management, strategic facilities management and, last but certainly not least, the 2015 guidance note Leistungsverzeichnis Asset Management in Deutschland, authored by the German RICS Professional Group on Asset Management (PGAM).
Thanks to these RICS publications we were able to come up with the right framework and optimal tender conditions.
Following the above method, it led me to think why I should not invite only RICS-regulated firms into the tender procedure? Thus, you not only get an external service provider that understands and complies with the directives of RICS guidelines and statements, but even has an ineluctable obligation to comply with the RICS Code of Conduct and ethics, making it easier for the principal to implement his own set of governance and compliance.
In any case, RICS-regulated firms should have the biggest chance of winning the tender procedure. However, to my surprise, while the biggest part of external property and asset management companies our institution works with are RICS-regulated firms, in every tender I was involved in, no regulated firm ever put any emphasis on being RICS regulated, or drew attention to the guidelines and standards they comply with, leaving the getting to know RICS to the principal.
So an appeal from my side to RICS regulated firms: be proud of being regulated, and, especially if you are starting to work for a principal that does not have the full understanding of the importance of RICS, explain it to them. Send them the documentation, emphasize the importance in the tender presentation, create awareness.
Using RICS standards and guidance notes as a unique selling point, especially to principals who are unfamiliar with RICS-regulated firms, might make you stand out and get the assignment.