Our Offer to You By: Gabriel PotterMBA, AIFA® 2015.09.30

A companion piece to our next issue of Confero

We hope you enjoyed reading the Summer 2015 edition of Confero, which focused on Compliance and Regulation.  We are hard at work on the Fall 2015 edition, which is all about Solutions.  More specifically, the theme of our upcoming issue is about responding to questions posed by plan sponsors.  We’ve assembled a distinguished group of experts to address these questions and provide points of view and possible solutions. 

We are planning on including a Q&A section in future issues of Confero to address specific and poignant issues facing plan sponsors today.  It’s our experience that many investment consulting shops don’t normally attempt to resolve some of the types of questions or  specific operational or compliance challenges that arise from time-to-time with plan sponsors.  We are fortunate to possess specific skill sets that we believe distinguishes our Firm from the traditional investment consultant shops.  Finally, how is it that Westminster Consulting gets these unique challenges to work on?

Investment consulting is the first step

So, what does a traditional investment consultant do?  Traditional investment consulting - conducting due diligence on investment managers, calculating portfolio performance versus benchmarks, and monitoring market forces to make appropriate tactical shifts to your portfolio, is a big part of what we do.  The classic investment consulting duties are essential and we aim to fulfill these duties professionally and thoroughly. 

The reality of traditional investment consulting is that it is a mature, well defined enterprise and many consultants could fulfill this role.  Traditional investment consulting is straightforward because it has had decades of tested market theory, thoughtful analysis, and legal requirements which explicitly spell out what best practices are. 

Fiduciary consulting is the next step

Traditional investment consultants generally are very good at what they do – providing investment advice.  While they don’t purposely ignore the legal precepts (governance, documentation, committee education) and outcomes (participant experience, spending policies, and vendor relationships), they rarely venture beyond their core competency.  In contrast, a fiduciary consultant, like Westminster Consulting, widens their vision to include these elements and engages in a more “holistic” approach to the client relationship.

An investment consultant which acts in a fiduciary capacity usually has business practices which are designed to act in the best interest of the client, without conflicts of interest.

The best practices for investment consulting are known to follow the fiduciary standard, but many large investment consulting firms on Wall Street do not willingly conform to these practices, because it conflicts with their existing business models.  You may have heard on the news, or read our blog posts, on proposed Department of Labor rules to elevate Wall Street business practices to a higher standard, but their lobbyists continue to fight these efforts, kicking and screaming along the way.  It’s too early to tell how successful the DOL efforts will be.

What else does Westminster Consulting do?

Westminster Consulting conducts business in the essential, core function as an investment consultant.  As a fiduciary consultant, Westminster Consulting works to promote their clients’ best interests with a fuller, comprehensive viewpoint.  We are defined primarily as an investment consultant and a fiduciary consultant, but there is more to the services we provide.

Your business or organization is always looking for ways to improve, and so do we.  A traditional investment consultant (working under the handcuffs of a broker/dealer relationship) may not even be allowed to think outside the box and provide advice beyond the limited scope of on-platform investments.  In contrast, we are curious about your business.  We enjoy listening to our clients, and their peers, to learn about their challenges and needs.  Beyond routine consulting, we fully embrace the opportunities to design creative solutions to unique problems.

Active consulting

Your organization faces challenges much more complex than merely managing a 401(k) portfolio; these issues fall outside the scope of investments, we always stand willing  to act as a sounding-board, to test ideas, and provide research on how industry peers are managing similar problems. 

A few examples:

  • An international retailer needed help allocating their spare foreign cash reserves.  We worked with them to design and delegate a comprehensive, layered cash management strategy.
  • A foundation needed a customized, single page snapshot of each element of their portfolio performance updated monthly.  We created (and update) it to their specifications.
  • A large retailer needed to defend their policy of providing company stock to employees through the unitized stock fund within their retirement plan.  We surveyed recordkeepers, analyzed historical returns, and consulted other professionals to give them working answers.

Legal & compliance

Our business is based on best practices, the highest known standards we can apply to our core operations, day-to-day work, and incentives.  However, the elements of best practices always evolve.  As a result, our business operations continue to adapt to make sure we are applying the highest possible standard, both ethically and legally. 

Project management & negotiated solutions

Westminster Consulting is often brought in to work on a specific project.  A great deal of our project work over the past few years has included benchmarking and negotiating vendor fee and service relationships for recordkeepers, custodians, actuaries, and investment managers.  These projects have the ancillary benefit to our clients of continuously providing us with constantly updated information about the most competitive rates and terms of service from a broad range of vendors.

Education & preparation

We work hard to protect our client’s with ongoing education and preparation.  Our consultants work directly with our clients’ boards and committee members to educate them about their investments, the markets, and their fiduciary responsibilities.  Moreover, over the past few months, we have had our clients engage in a Department of Labor mock-audit exercise.  Preparing our clients for the document collection aspect of an audit has been applauded by clients as this stage of the audit is both crucial and exhausting.

Sector proficiency

Our business has always been built on client referrals.  As a result, we tend to accumulate clients in the same industries, as clients discuss their experiences with peers.  This gives us an edge in familiarity, as we’re able to more fully understand the legal and market factors which impact our sector-peer clients similarly.  Some sectors include US-operated subsidiaries of foreign owned companies, fashion retailers, professional partner firms (CPAs, attorneys), and health care institutions.

Our offer to you

For our newest clients, we want to remind you that we are here to satisfy your needs beyond classic investment management.  For our longstanding clients, we want to affirm with you that we are always interested in hearing about your unique challenges.  We are always looking for ways to expand our repertoire, and find new ways of working for you or peers.

So go ahead:  hit us with your best shot.  We welcome the challenge.


Gabriel Potter

Gabriel is a Senior Investment Research Associate at Westminster Consulting, where he is responsible for designing strategic asset allocations and conducts proprietary market research.

An avid writer, Gabriel manages the firm’s blog and has been published in the Journal of Compensation and Benefits,...

More about Gabriel Potter
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