Jensen Investment Management is a US-based investment management firm founded in 1988. Over the years, it has attracted some complaints regarding its services and business practices. This article will analyze the key issues in Jensen investment management complaints, including high fees, poor performance, lack of transparency and misrepresentation. Problems like overcharging clients and underperformance relative to benchmarks have eroded trust in Jensen Investment Management. There is also a need for more clarity in their disclosures to clients. By understanding the nature of these complaints, clients can make more informed choices and the company itself can improve in the relevant areas. The analysis will also highlight the lessons for investment managers in general when it comes to upholding best practices. Building trust and long-term relationships should be the goal rather than short-term gains.
High management fees and costs
One of the most common complaints against Jensen Investment Management is that their fees are excessively high, especially when taken together with other costs charged to clients. They are known to charge management fees upwards of 1% of assets under management irrespective of portfolio size. Several clients have reported fees being almost 2-3 times more than comparable services from other firms.
According to many users, Jensen does not properly justify the high fees being charged given the resources required for their investment strategy is not particularly extensive. The overall costs can eat significantly into client returns over time.
From Jensen’s perspective, they provide customized and active portfolio management justifying higher fees. But many believe the fee structure is misaligned with value delivered and makes them seem more focused on increasing fee-based revenue.
Underperformance relative to benchmarks
Multiple users have flagged Jensen’s poor performance relative to standard industry benchmarks. Their portfolios often fail to match or outperform benchmark returns over the short and long term.
Based on independent analysis, their flagship Jensen Quality Growth Fund has lagged the S&P 500 index substantially over the 3, 5 and 10 year periods. The underperformance is persistent and concerning.
While markets do witness downturns, the sheer magnitude and consistency of Jensen’s underperformance has raised doubts regarding their stock selection strategy and execution capabilities.
Lack of transparency
Several complaints indicate that Jensen Investment Management lacks transparency when it comes to their investment approach, portfolio holdings and performance reporting. Many users are unclear about their stock selection criteria, investment universe and how they generate alpha.
In annual SEC filings, Jensen Quality Growth Fund has mentioned using qualitative factors like management credibility, debt levels, insider ownership etc. But there is little clarity on how these get translated into buy/sell decisions. Their reports also don’t explain key changes being made to portfolio composition.
Such lack of transparency prevents clients from fully understanding the investment process and portfolio positioning.
Misrepresentation of capabilities
Some clients have alleged that Jensen Investment Management misrepresents their actual capabilities in marketing and client communications. Their presentation emphasizes sustainability, risk control and downside protection. But the persistent underperformance seems contrary to claims of safety and low volatility.
There are also complaints about their customer service and portfolio managers being inaccessible or unresponsive to client queries. For an investment firm managing billions in AUM, clients expect responsiveness and accountability from advisors.
In summary, analysis of Jensen investment management complaints reveals issues like excessive costs, underperformance, lack of transparency and misrepresentation that have damaged trust. The firm needs to reevaluate its fee structure, portfolio management process and client communications. Investment managers should aim for fairness, transparency and aligning client interests with their own.