Investment Policy Statement (“IPS”) Development and Review
We assist clients with preparation and ongoing review of a written Investment Policy Statement, including customized investment objectives and guidelines under which the client’s investment goals are to be achieved. The IPS typically includes the:
- Responsibilities for the Board/Committee, Staff, and various service providers;
- Asset class allocation targets, permissible ranges, and rebalancing policy;
- Guidelines for investments within each asset class;
- Types and styles of investment managers and/or funds;
- Criteria for selection of investment managers;
- Procedures and timing for monitoring investment performance; and
- Guidelines to establish risk tolerance for the separate strategies and the aggregate risk of the total portfolio.
Asset Allocation and Manager Structure
We use asset allocation studies as a strategic planning tool, seeking to optimize the balance between a portfolio’s expected risk and return. Our analysis involves a review the following elements of an asset allocation strategy:
- Client-specific goals and objectives;
- Inputs regarding expected return and risk, time horizon, liquidity constraints, asset class preferences, and tax status (if applicable); and
- The suitability of the final allocation to a client’s goals and objectives.
Once a high-level strategic asset allocation target is determined, we also assist clients in developing appropriate manager structures, analyzing various options for selecting and weighting individual managers and strategies within each asset class.
Investment Manager Research, Selection, and Monitoring
We vet all investment manager recommendations through our Investment Committee, which is comprised entirely of senior, client-facing professionals. We believe that clients are best served by investment manager recommendations that arise from investment professionals that work directly with clients and understand their specific needs. As well, we believe that the Investment Committee approach allows us to share insights and ensure consistency in our recommendations.
We perform ongoing investment manager research, evaluating the broad universe of available managers via both quantitative analysis and qualitative evaluations. We perform detailed due diligence on managers prior to recommendation and on an ongoing basis once selected. Our focus is finding investment managers, strategies and vehicles that meet each client’s individual circumstances and needs. Factors considered in making this determination include not only investment performance, but also investment philosophy and strategy, quality of investment team, management approach, assets under management, account size, risk tolerance, and associated fees.
Investment Performance Reporting and Monitoring
We prepare a customized performance report for each client on a quarterly basis, or more frequently as necessary, to facilitate review and ongoing monitoring of the plan. Our reports compare and analyze total plan performance versus a custom policy index and relevant plan sponsor peer group, as well as individual manager performance compared to appropriate investment manager peer groups and relevant industry benchmarks.
Client education is a core tenet of our service offering. Our consulting services generally include education for Trustees and professional staff, covering a wide range of topics relevant to the management of the investment program. We seek to integrate education efforts in each deliverable we provide our clients and are also responsive to specific client requests.
We also provide educational support and investment workshops designed for plan participants of profit sharing and 401(k) plan clients.
Other Consulting Services
We have capabilities in providing clients a number of other services, as needed and applicable, including but not limited to:
- Defined Contribution Plan Evaluations
- Third Party Administrator (TPA) Searches
- Trust and Custody Evaluations
- Cash Management Reviews
- Transition Management Searches
- Spending Policy Analyses
Implemented Consulting Services
Clients may elect to engage Sellwood to manage their portfolios on a discretionary or non-discretionary basis. This option typically provides for Sellwood to select and terminate managers, execute trades, and rebalance assets within a client’s portfolio. Consistent with our philosophy that investment advice should be customized to each individual client, we believe that the degree of discretion afforded an advisor by a client should also be customized. While we are capable of simply managing a client’s portfolio within agreed Investment Policy guidelines, we also work with clients to customize the level of discretion with which they are most comfortable. We do not believe that “discretion” is a binary on-off condition when it comes to investment advice, and we encourage our clients to consider which level of discretion fits them best.
We are also happy to provide investment advice on a more limited, special project basis. This may include assistance or advice on only an isolated area of concern, such as an investment policy statement, asset allocation, defined contribution plan lineup review, or any other specific topic.