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Investments


We are hired for our knowledge and experience in recommending and monitoring investment options. It is our responsibility to help you maintain a process of selecting and deselecting funds for your 401(k)’s investment line-up.

Investment Policy Statement (IPS)
Critically, the combination of an Investment Policy Statement (IPS) and the Investment Committee Charter (ICC) formally confirms the parties involved and the scientific process for investment selection and deselection. We assist in the development of an IPS. If the Plan has an existing IPS we assist in the Plan’s review of the existing IPS in determining whether the Plan’s investments are consistent with the goals set forth in its IPS and assist in identifying appropriate revisions to the IPS. We also assist with review of the investment objectives of the Plan to confirm they continue to meet the needs and objectives of the Plan and its IPS.

Investment Fund Line-Up
Each quarter we review with you a comprehensive analysis of the investment options and the Plan’s investment allocation and, when warranted, recommend possible change in investment option(s). We leverage technology which allows us to score and evaluate investments based on a number of criteria and data points. Low scored funds go onto a watch-list and we propose changes in an understandable and well documented format. In our experience, Trustees and members of the Investment Committee all have different degrees of how granularly they want to drill down into the review. We provide visual bottom line reports followed by deeper evaluations to provide the amount of information each person on the committee may want. Trustees and Investment Committee maintain discretion and control of the investment menu, and as Investment Advisor we accept fiduciary responsibility with Plan Sponsors under ERISA Section 3(21) and adhere to ERISA 404(a)’s duty to serve solely in the interest of plan participants. If the election is to make an investment change to best serve the Plan and its participants we maintain the documentation, process the transactions, and help you notify participants.

How many funds?
The goal is to maintain a solid fund line-up that is diverse enough to serve the employees while being lean enough to not overwhelm. Too many funds can leave employees with analysis paralysis and drive up costs of the plan. We work with you to identify the right amount of investment options that works for your population.

Target-Date/Asset-Allocation Investing versus Building Your Own Portfolio
For employees who want to build their own portfolio we provide risk tolerance tools and education. Not surprisingly, there is a significant amount of 401(k) money staying in the Qualified Default Investment Alternative (QDIA). In addition to closely monitoring the investment options within each asset class, we take very deep dives into the Target-Date, Asset-Allocation Investment and QDIA funds. It is important to understand the glide-path of your target-date fund options and what that means for plan participants. It is also important to know and be able to show “your why” on active versus index fund options, or any of the other options of investment strategies, example hybrid, within the target-date series.

Investment Fees
We review funds and present prudent selections based on a host of criteria. We are fee conscious but not singularly fee focused as we look at the net performance compared to peers. What requires discipline is identifying and selecting the right share class for your funds. If you have the option of the same exact fund at a lower price you would always select the lowest net investment expense ratio for that fund. Determining what the lowest net expense ratio is and making sure it is levelized for all employees is the challenge.

You may hear industry jargon like wrap-fees, Sub-TA, revenue sharing and they all must be examined closely. Fund families present their fees in different ways. Counter intuitively, the answer is not always the zero-revenue share options. We share a commitment doing the research to identify and help you understand the lowest net investment cost on every investment you would like to offer.

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