Improving Diversification and Service

Service: Investment Management
Client Type: Not For Profit Organization
Former Service Organization: Large Brokerage Firm

This regional, not-for-profit organization had worked with a large national brokerage firm for years. The firm had the portfolio invested with four separate account managers – one bond manager and three equity managers. The total fees were 1.60% annualized in a 50/50 balanced portfolio strategy, which is high. We noted that the managers involved generally pay a percentage of their overall fees back to the brokerage firm, which is an inherent conflict of interest. The client was not pleased with the performance or service that the large brokerage firm provided.

We utilized a broadly diversified portfolio strategy comprised of top-performing, institutionally-priced mutual funds, ETFs, and select individual securities for this client. While we reduced the number of accounts from four to one, we added meaningful asset class diversification and lowered the overall fees from 1.60% to 0.86% – a significant reduction.