Investment Selection, Monitoring, and Registered Investment Advisor (RIA) Services *
Cammack LaRhette has been a consultant to defined contribution retirement plans since 1958. We evaluate the individual needs of each of our clients, and develop custom solutions, an approach we have developed over many years. What may suit one client does not always work for another.
A core strength is our expertise in investment analysis. We perform comprehensive reviews of the investment fee structures/revenue sharing, and evaluate investment providers on the basis of the criteria established for each client. Our in-depth knowledge and extensive experience with providers enable us to attain the most competitive arrangements for our clients, since we do not have a list of "preferred" investment providers. Moreover, we have worked with virtually every service provider in the marketplace.
One of the major components of a plan's fiduciary obligation is to provide appropriate investment choices to employees. Cammack LaRhette's comprehensive due diligence review assists clients in satisfying requirements that investments be regularly monitored for prudence. Our review also provides valuable information to support the "prudent expert" standard of investment review, including:
- Performance versus benchmark and peer group rankings
- Investment risk
- Investment management fees
- Unique review parameters associated with the use of fixed interest annuity accounts, versus institutional or retail mutual funds.
Perhaps the most important way to minimize investment risk is to build a diversified portfolio, which tends to provide greater return for less risk over time. We want to make sure that the investments offered give investors the opportunity to build a diversified portfolio with low correlation.
Cammack LaRhette rigorously approaches the fiduciary responsibility of investment consulting. Through our registered investment advisor (RIA), we perform a co-fiduciary role with regard to the investments recommended for your program. We also take a holistic approach to the impact that our investment consulting recommendations have on an organization's human resources staff, the day-to-day administration of the plan, and the plan participants. For example, an excessive number of available investments can cause "paralysis by analysis", resulting in lower employee participation.
Any changes to an investment lineup call for employee communication and education. Switching investments often creates administrative headaches and causes participant confusion and dissatisfaction. For these reasons, when considering a replacement fund, we carefully weigh how long a fund should be kept on the watch list before replacement occurs. Last but not least, we carefully guide our clients through the development and use of an investment policy statement, which is a critical component of the investment review process.
As a full-service consulting firm, at Cammack LaRhette we implement what we recommend. We immerse ourselves in the details of the execution of plan changes. As an example, we have extensive experience in rolling out communications and education in order to provide a smooth transition to a new or revised fund line-up
- Well in advance of the change
- Just before the change to refresh memory
- At the time of the change
For fifty years, Cammack LaRhette Consulting has been meeting with participants about the investments in their plans. We offer two levels of assistance: guidance and advice (RIA Services).
Guidance
The Department of Labor bulletin identifies four broad categories of information as investment guidance:
- Plan-specific information
- General financial and investment education
- Asset allocation modeling
- Interactive investment material
Guidance provides education, information, models and tools to help participants make investment decisions. Cammack LaRhette is experienced in guiding employees through this process, although the final investment decisions are theirs alone.
Investment Advice
Investment advice takes another step. We provide participants with specific recommendations on methods for investing for retirement, such as:
- Software programs, such as Morningstar/Ibbotson or Financial Engines
- Managed accounts
- One-on-one meetings with advisors
We believe that investment advice is best provided in the context of one-on-one meetings. Our registered investment advisors can guide employees in establishing and maintaining an appropriate level of savings and a suitable investment portfolio, designed to meet their retirement needs. By asking a series of suitability questions, we can determine an individual's risk tolerance and develop a long term asset-allocation strategy. Our advisors use principles of modern portfolio theory to design customized model portfolios, incorporating investments offered by the plan. That way, they provide the participant with a balanced and effective approach to investing retirement assets.
