After almost three years, it was over. This past December, Callan Associates, a San Francisco-based investment consultant overseeing asset managers in Charles Schwab's managed account program, removed Chartwell Investment Partner's large-cap value equity product from the Schwab platform. Callan noted that Chartwell had underperformed the median benchmark performance for nine out of 12 previous quarters and occupied the bottom decile for four of those nine quarters.

Was Callan's replacement of Chartwell typical of what happens behind the scenes among the 400 or so asset managers and sponsoring brokerage firms that constitute the separately managed account business? What, specifically, do analysts and consultants look for when studying managers? And, finally, do ongoing performance analysis and manager rotation lead to better results for clients?

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