Managing the details
Operating as exclusively a yacht management company, 8 Yachts have recently announced their collaboration with Dubois for management services. Catching up at the Palma Superyacht Show, SuperyachtNews.com speaks to co-founder and director Jim Passmore about the current state of the management sector and its need for evolution.…
Operating as exclusively a yacht management company, 8 Yachts have recently announced their new collaboration with Dubois for management services. Speaking exclusively to SuperyachtNews.com at the Palma Superyacht Show last week, co-founder and director Jim Passmore is concerned that a conflict of interests exists with many of the management options currently available on the market.
“Many management companies are also brokerage houses,” he explains. “If paid a monthly fee to manage a vessel, there are those who would question whether the same company is fully motivated to sell that vessel, and lose it's stream of monthly management fees as a result.
“It's also common industry knowledge that many management houses receive commissions and referral fees from shipyards, brokers and other contractors for directing work their way. Unless these payments are declared to their clients, these arrangements clearly represent a conflict of interest, as the payments could change the advice managers give to their owners as they are no longer totally independent.”
While yacht management aims to make crews’ lives easier, reduce running costs and improve the efficiency of operations, Passmore believes that some may not be serving this purpose. “Some management companies are not doing that at all and in some cases they are doing the opposite,” he explains. “For many owners, the one-stop, in-house arrangements work but I think the way that the industry is currently set up there aren’t a lot of options for owners to do anything other than that. I think the management sector does need a bit of a shake up.”
With regards to the company’s latest collaboration with Dubois, Passmore is positive about the rewards it will bring to all parties. “8 Yachts stands to benefit from a close link up with the premium brand that Dubois is, and the clients they have,” he says. “And Dubois stand to benefit by having their fingers on the pulse with how their owners are enjoying ownership, during a time when they would otherwise have little contact with them. The owners also stand to benefit because they have access to proactive management that genuinely cares about them.”
“Many management companies are also brokerage houses,” he explains. “If paid a monthly fee to manage a vessel, there are those who would question whether the same company is fully motivated to sell that vessel, and lose it's stream of monthly management fees as a result.
“It's also common industry knowledge that many management houses receive commissions and referral fees from shipyards, brokers and other contractors for directing work their way. Unless these payments are declared to their clients, these arrangements clearly represent a conflict of interest, as the payments could change the advice managers give to their owners as they are no longer totally independent.”
Jim Passmore, co-founder and director of 8 Yachts, at the Palma Superyacht Show
In addition to this, Passmore has found that some companies have little incentive to try to reduce a yacht’s running costs. “On a recent audit of a set of accounts from one 35m-plus yacht under full management from a mainstream management company, the yacht’s Insurance policies were at least 50 per cent over the market rates,” he recalls. “The crew food budget was 100 per cent more that most of the yachts under our management. Quite obviously basic financial management controls were not in place and a competitive tender on insurance had not be done for some years.”While yacht management aims to make crews’ lives easier, reduce running costs and improve the efficiency of operations, Passmore believes that some may not be serving this purpose. “Some management companies are not doing that at all and in some cases they are doing the opposite,” he explains. “For many owners, the one-stop, in-house arrangements work but I think the way that the industry is currently set up there aren’t a lot of options for owners to do anything other than that. I think the management sector does need a bit of a shake up.”
With regards to the company’s latest collaboration with Dubois, Passmore is positive about the rewards it will bring to all parties. “8 Yachts stands to benefit from a close link up with the premium brand that Dubois is, and the clients they have,” he says. “And Dubois stand to benefit by having their fingers on the pulse with how their owners are enjoying ownership, during a time when they would otherwise have little contact with them. The owners also stand to benefit because they have access to proactive management that genuinely cares about them.”
Profile links
Click here to become part of The Superyacht Group community, and join us in our mission to make this industry accessible to all, and prosperous for the long-term. We are offering access to the superyacht industry’s most comprehensive and longstanding archive of business-critical information, as well as a comprehensive, real-time superyacht fleet database, for just £10 per month, because we are One Industry with One Mission. Sign up here.
