Streamlining and Cutting Costs

Service: Investment Management
Client Type: Not-for-Profit Organization
Former Service Organization: Hybrid Advisory Firm

This national, not-for-profit organization had worked with a local advisory firm for years. The advisor put itself in the role of selecting outside management firms to manage the portfolio for this organization. The result was layers of management and layers of fees. The firms that were hired by the advisor used proprietary products, which resulted in conflicts of interest and higher fees.

The client’s four asset pools were comprised of 25 different accounts, which was very difficult to track and cumbersome to operate from an accounting standpoint.

The client was paying 1.67% in total annualized fees for performance it was not pleased with. Additionally, the advisory firm reported to the client just twice per year and did not provide enough details for the finance committee members to properly evaluate performance.

We simplified their entire structure by consolidating the four asset pools into two, and taking 25 different accounts down to two as well. The manager selection process was streamlined and, as such, we eliminated a layer of fees. Importantly, we cut the overall operating expenses from 1.67% to 0.85% – roughly in half. We are firm believers that keeping overall operating costs lower gives clients their best chance for long-term investing success.

Further, we provide complete transparency in terms of fees and performance detail, which allows the client to quickly make evaluations and focus on their very important primary business operations.

We also handle the company’s 401k plan, whereby we meet semi-annually with company employees as a group and offer individual employee meetings. This has been a very important value-added benefit for the client.