Everyone selling "strategic advisory" and nobody selling an opinion they'd sign

Question

Read three consulting proposals for a portfolio review this month. All three had the same structure. Data gathering, stakeholder interviews, scenario modeling, findings presentation. All three had a limitations section running longer than the methodology section. One of them, and I did read the whole thing, disclaimed reliance on any of its own conclusions by any party including the client.

So what am I paying 60k for. A model I could build and a set of interviews I could conduct, wrapped in language that says don't rely on it.

I understand why the disclaimers exist. But there has to be a market segment where someone will write "sell the four suburban office assets before the 2027 maturities and here is what I think you'll get," put their name on it, and stand behind it in the sense of reputation if nothing else. Is that segment just smaller and more expensive, or does it not exist because insurance carriers won't write E&O for it?

Rena Expert · Accepted Answer

Both segments exist and they're priced for different buyers. The 60k deck is bought by someone who needs a defensible process on the record, usually a fiduciary with a committee. The disclaimers aren't decoration in that context, they're what makes the report usable, because a report that says "rely on this" transfers risk the firm won't accept at that fee.

The signed opinion segment is real and smaller. It tends to come from individuals or two-person shops with a track record specific enough that reputation is collateral. You'll get "sell the four suburban assets, my estimate of clearing price is X to Y, here are the three conditions that would change my view." That's a genuine recommendation with named contingencies, which is different from a hedge, and it's usually 15k to 40k for a portfolio your size rather than 60k. The tradeoff is that the individual has no institutional balance sheet behind them, so if you need someone to be suable, you're back to the firm.

ledger is right about the E&O mechanism and it's worth pushing on directly. Ask any prospective consultant what their policy covers and whether specific recommendations are within it. Some will tell you. The answer tells you exactly how far they'll go on paper.

One thing your framing skips. A firm that models your portfolio and interviews your stakeholders is also producing a record of what your own people said about those assets, and that record can be inconvenient later if a lender or an LP subpoenas it. If the four office assets have maturity problems, a discoverable internal analysis saying so has consequences your engagement letter should address before the work starts. That's a question for your counsel, not the consultant.

hannah_west29 · Answer

The 60k is buying an independent name on the cover for your board or your LPs. That's the actual product in a lot of institutional advisory work, and it's not nothing, it just isn't the product you thought you were buying. If you want a signed opinion you probably want a smaller firm or an individual, and you'll pay 20k for a memo instead of 60k for a deck.

On E&O, I've seen policies that exclude coverage where the consultant provided a specific investment recommendation as opposed to analysis. Not universal, but it exists, and it explains a lot of the hedging language you're reading.

jordan_ellis2 · Answer

The line about "disclaimed reliance by any party including the client" is the part I can't get past. What is the client if not a party? Is that boilerplate someone forgot to edit or is it actually enforceable?

stephen_ok9 · Answer

pike, I've seen that language and it looks aimed at limiting a claim later, not at the client literally being told to ignore the report. Whether it holds up depends on the state and on how the engagement letter is written, which is a lawyer question.

fathom, the thing I'd push on is who signs. Ask which named individual is doing the analysis and whether they'll be in the room for the findings. Big firms sell you a partner and staff you with two analysts. If the partner's name is on the cover and the partner can't answer a question about the absorption assumption without turning to someone, you're paying 60k for the letterhead. I've stopped assuming the proposal team is the delivery team.

Everyone selling "strategic advisory" and nobody selling an opinion they'd sign

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