Our Services
Morrison Fiduciary Advisors provides pension consulting services and Outsourced Chief Investment Officer (OCIO) services through a comprehensive unified fee schedule that includes all of the services offered by the firm. In this arrangement, the consultant serves as the ‘chief investment officer’ and accepts a sense of responsibility for the overall operation of the fund. This allows the fund to realize the full benefit of all of MFA’s professional capabilities on a continual and ongoing basis.
Morrison Fiduciary Advisors can also be engaged on an introductory basis to perform a complete analysis of the client fund. In this capacity, Morrison Fiduciary Advisors reviews the client’s investment policy, asset allocation, investment managers, vendor costs and other important functions of the fund and identifies areas of potential improvement and outlines a strategic plan for implementation.
A well designed investment policy statement is an essential tool for the effective governance of an investment fund. The primary purpose of the investment policy statement is to define a long term asset allocation strategy that reflects the client’s investment goals and risk tolerances while considering the fund’s expected liability structure. The investment policy statement should also serve as a strategic plan for the daily administration of the fund including setting meeting schedules, defining the mechanics for decision making, identifying the responsibilities of administrative staff and setting the expectations for vendors serving the fund. Morrison Fiduciary Advisors meets with client accounts to define the goals and objectives of the fund. Based on these meetings, Morrison Fiduciary Advisors prepares a customized investment policy statement that reflects the unique investment objectives of each client including criteria for hiring and terminating vendors, establishing trading policies for the fund’s investment transactions, specifying what consideration may be given to local vendors, suggesting fee schedule strategies and addressing additional operating issues important to the fund’s governance. Once the investment policy statement is initially approved, it is periodically reviewed and updated to reflect the changing investment environment and the continual evolution of the investment marketplace. (Back)
Establishing an effective asset allocation policy is the single most important determinant of a fund’s long term investment results. Morrison Fiduciary Advisors believes that maximizing a fund’s diversification is a primary fiduciary responsibility and the use of multiple investment styles is maximized whenever practical.Morrison Fiduciary Advisors uses Monte Carlo portfolio optimization simulations that identify historical investment risk and asset class returns and the correlation of these investment returns amongst the various investment styles. The optimization process then projects the impact of various market environments and allows the client to base their asset allocation decisions on a quantified investment modeling process that demonstrates the inherent trade off between investment risk and potential return.On an ongoing basis, a client’s investment allocation is reviewed and the allocations to individual investment managers are rebalanced to reflect policy guidelines. Additionally, Morrison Fiduciary Advisor periodically suggests tactical adjustments to the fund’s allocation to reflect the realities of various economic environments. Examples of tactical adjustments include shortening fixed income maturities during periods of rising interest rates, underweighting growth oriented stocks during the recent market adjustment period and considering real estate and high yield fixed income asset classes to increase portfolio yield while limiting risk of principal.(Back)
Morrison Fiduciary Advisors’ performance measurement process is designed to summarize analytical information and to present meaningful recommendations and conclusions based on the consultant’s professional judgment and consulting experience. This interpretive approach is different from many other consulting firms that present overwhelming volumes of analytical data without meaningful interpretations and conclusions. Performance measurement is performed to compare the fund’s investment results with established criteria to confirm whether the current fund strategy and individual investment managers are meeting client expectations. Additional consideration ensures the fund remains in compliance with investment policy guidelines and corrective action is taken as required. Morrison Fiduciary Advisors uses the Wilshire Associates Co-Op for performance measurement. Wilshire is among the largest and most comprehensive performance databases available and tracks performance for thousands of plan accounts representing over $1.0 trillion in assets under advisement. Wilshire compares the total fund and each investment manager against a specific published performance benchmark as well as peer group universes. Security level analysis is also performed to identify portfolio composition, trading activity, performance attribution and sources of over and under performance. Morrison Fiduciary Advisors performs additional qualitative analysis that considers the investment process, organizational changes, qualifications of professional staff, trading activity and other relevant issues. (Back)
All vendor searches are customized to meet each client’s specific needs. Unlike many consulting firms, Morrison Fiduciary Advisors does not inject its preference for a list of preferred managers or utilize a pre-set portfolio structure. Instead, investment managers are selected when their unique qualifications match individual client search parameters. The primary goal of the search process is to identify superior investment managers that have the correct balance of investment risk versus the potential for return exceeds policy benchmarks after adjusting for fees. The search process begins with a qualitative screen of all potential managers to identify those with appropriate investment styles and performance characteristics that warrant additional consideration. These select investment managers are then further screened by the consultant with input from the client to arrive at a final list of three to five managers that are qualified to meet the client’s investment mandate. Together, the client and consultant interview these finalists to identify the personality and character of each firm so that the client’s personal preferences can be established. After the interviews are held, client discussion continues and one firm is ultimately selected to serve the fund. The entire search is designed to be a consensus building exercise with client input being considered at all times. Once the new investment manager is selected, the consultant stays involved through the entire contracting and transfer process to perform final fee negotiations, coordinate the transfer of assets, establish performance benchmarks and address additional administrative details. Morrison Fiduciary Advisors routinely meet with existing and prospective investment managers to evaluate both quantitative as well as qualitative factors. Evaluative criteria include historical investment performance, reasonableness of investment process, experience of investment professionals, organizational structure, client service capabilities, trading strategies, portfolio risk characteristics, investment style discipline and fee schedule competitiveness. (Back)
Proactive management of vendor costs can produce significant, annuity like benefits to the fund. These savings compound over time and can materially impact the long term results of any investment fund. Morrison Fiduciary Advisors performs thorough cost analysis on all vendor services including asset management fees, commission recapture programs, trading costs (both equity and fixed income), custody fees, administrative charges and other vendor services. Morrison Fiduciary Advisors use institutional surveys and practical experience to establish fee schedule expectations that are fair and reasonable but reflect the competitiveness of today’s institutional marketplace. In most cases, more competitive fee schedules can be negotiated with the client’s existing vendors. Rarely does a vendor relationship need to be replaced solely because of fee schedule considerations. (Back)
DEFINED CONTRIBUTION CONSULTING
Morrison Fiduciary Advisors assist clients with the design, implementation and monitoring of their defined contribution plans. Morrison Fiduciary Advisors work closely with clients to develop investment programs which offer participants well diversified portfolios with appropriate risk and return characteristics. The consulting effort assists plan sponsors in fulfilling their fiduciary responsibilities by implementing programs to improve participation rates, reduce expenses and optimize the mix of investment options for participants. Services include record keeping searches, investment option design, fund selection and other services important to defined contribution plans. (Back)