A TIME FOR EXCELLENCE
Uncertainty. Fear. Market volatility. Isolation. Desperation. Most of us have never experienced anything like the environment we live in now. The world has changed before our eyes and no one can confidently predict how it will look in the next 6 to 12 months. If investors or plan participants were mindful of their portfolios before, they could be downright panicked now.
This is the time for excellent fiduciaries and service providers to prove their worth.
Excellence and leadership are tested in difficult times and this holds true for those who are entrusted to give advice and service retirement plans.
On the one hand, excellent fiduciaries fulfill the labor-intensive task of monitoring portfolios. This involves a need to respond to changes in the economic environment, as we are observing now. The
ongoing
review, analysis and monitoring of asset allocation and money managers are just as important as the due diligence used at their selection.
The excellent advisor will take into account such factors as
:
1. Prevailing economic conditions
2. The size of the portfolio
3. The investment objectives sought
4. The investment strategies employed
5. The volatility of the investments selected
6. The fiduciary or other regulatory obligations to the client
On the other hand, excellent recordkeepers and Third Party Administrators must adapt to new plan service models, manage new rules and options for participants and process higher transactions while maintaining data privacy. They must also increase vigilance of fraud, given the new remote work environment.
The quote from Dr. Robert Kennedy, University of St. Thomas, used in “The Prudent Practices for Investment Advisors” is ever so appropriate:
“Society depends upon professionals to provide reliable, fixed standards in situations where the facts are murky or the temptations too strong. Their principal contribution is an ability to bring sound judgment to bear on these situations. They represent the best a particular community is able to muster in response to new challenges.”
This email is to recognize the excellent fiduciaries and service providers who will continue to deploy their skills and prudent processes in this time of uncertainty.
Respectfully,
Carlos Panksep
VP, Centre for Fiduciary Excellence
