1. Fiduciary Service
Why Are Fiduciaries Turning to
Independent Investment Advisors?
2. Why Are Fiduciaries Turning to
Independent Investment Advisors?
Fiduciaries must be prudent experts if they are to act in a capacity that
meets the standards outlined in ERISA §404(a).
Most good people placed in positions to oversee their company’s
retirement plan are not trained in investment matters and yet ERISA holds
them to the same process standards as a professional money manager.
3. Rising fiduciary concerns are catching
the attention of regulators.
DOL Working Hard in the Atlanta Area to Ferret Fiduciary Breaches, Ilene H.
Ferenczy, LLC, April 24, 2008.
Court Says Section 401(k) Plan Participants Can Assert ERISA Section 502(a)(2)
Claim, Meredith Maresca, April 3, 2008
First fallout from the LaRue case from February, 2008.
DOL reported the following statistics for the one year period ending 9/20/07:
$1.5 billion in total monetary results (fines, penalties, etc.)
74.23% of civil investigations closed with monetary results (this is a 30%
increase since 9/30/2001 which means they are getting more aggressive in
handing out penalties)
37.23% of criminal investigations closed with guilty pleas or convictions
161,000 worker complaints led to $96 million in monetary results and 687
new investigations
4. Why Sentinel Benefits & Financial Group?
We are licensed investment advisors.
Our fees are fully disclosed in writing and we are not permitted to accept
compensation from investment managers.
We are independent and work exclusively on behalf of our clients.
We bring investment expertise to your due diligence team and we shoulder
an equal share of the responsibility for our actions.
We will acknowledge our role as “investment manager” as defined in section
3(38) of ERISA and thus a fiduciary, with respect to the plan through written
agreement.
We are a plan co-fiduciary.
We carry $15-million in E&O insurance coverage.
5. Investment Research Process
Our tools and resources…
Identify investment managers
that have demonstrated more
consistent long-term performance
in their areas of expertise.
1. Quantitative. We review an investment
manager’s rate of return, relative risk
measurements, and management
expenses as compared to its peer group.
2. Qualitative. We also evaluate a
manager’s reputation for ethical practices,
style consistency, and administrative
infrastructure.
The foundation of our
3. Bottom Up Selection Process. long-term investment
We concentrate first building diversified management approach is
our expertise in research
portfolios using low correlating asset classes and disciplined
and then we seek the best money methodology.
managers that specialize there.
Matthew H. McPhail, CFA
Chief Investment Officer
6. Investment Advisory Services
Diagnostic Plan Appraisal Manager Investment Selection
Process
We will evaluate your plan’s current
investment offering by benchmarking Our investment manager research and
the investment return, risk, and selection process is designed to select
expenses to its peers and relative the appropriate asset managers for
indices, by providing an assessment of each asset class to be represented
asset class overlap or gaps, and by within the plan. Our quantitative
evaluating the overall investment screening ensures that each manager
offering to the plan’s current meets superior standards for style
investment policy statement. consistency, risk adjusted performance,
consistency of performance and low
Develop Investment Policy expenses. Our experienced analysts
further assess the philosophy behind the
Statement numbers, the process by which it is
implemented and most importantly the
We develop an Investment Policy
people who manage the portfolios.
Statement that is consistent with ERISA
404(c).
7. Investment Advisory Services
Lifestyle Portfolio Management
We create three Lifestyle Portfolios from
the funds offered in your Plan. Each
portfolio will be designed to meet a
specific risk-return profile. Lifestyle
Portfolios allow investors the opportunity
to choose one fully diversified investment
solution that is designed to match their
individual goals, risk tolerances and time
horizons. Each portfolio invests in a
diversified mix of funds carefully chosen
by Sentinel Pension Advisors. As an all-in-
one solution, Lifestyle Portfolios are
designed based targeted asset mixes of
cash, fixed income and equity funds.
8. Investment Advisory Services
Monitor and Measure Trustee & Investment
Committee Meetings
Once the plan’s investment policy has
been established and the investments When appropriate, we will
have been chosen, we will continue to arrange a meeting with the Plan
subject the funds to a comprehensive Trustees to document the
performance attribution analysis to ensure performance of the plan’s
that each investment continues to investments and to make any
demonstrate the performance and asset recommendations that may be
class characteristics that it was selected to appropriate for changes. These
provide. meetings are documented and
become part of the Plan’s Due
Diligence file.
Participant Counseling
Provide employee group
communication services to plan
participants. Meetings will be
done onsite at the client’s work
facility. Individual meetings are
also available.
9. Participant Counseling
4 different group presentations
401(k) Education (cover Plan specifics)
Investment Basics
Financial Planning
Retirement Income Planning
10. Participant Counseling
One-to-one meetings with plan participants
30 minute sessions scheduled in advance to “The foibles of plan participants
have become common
allow advisor time to prepare knowledge. Intimidated by the
prospect of having to make
Discuss Your 401(k) investment decisions, some
employees avoid enrolling in the
Personal Risk Assessment plan at all. Those who enroll often
Retirement Income Planning feel overwhelmed by the number
Asset Allocation Analysis of investment options, and simply
select one or two funds instead of
Discuss Other Accounts to coordinate Financial a diversified allocation. Of the
Plan participants who do diversify
properly, few follow up later to
review and rebalance. Small
minorities of participants make
hyperactive investment changes,
but the vast majority make almost
no changes
at all.”
John Nelson,
PLANSPONSOR Magazine
September, 2006
11. Wealth Management Services
Retirement Income Planning
Accumulation Phase – contribution targets, asset allocation
Distribution Phase – distribution targets, cash flow analysis, asset allocation
Annual Review
Asset Protection
Review strategic uses of insurance
Complete needs analysis including life, health and long-term care
Tax Planning
Proactive tax minimization strategies Attorney
Work with existing accountant or
establish new relationship
Tax &
Accountant Estate
Estate Planning Expert
Review strategic estate planning strategies to Financial
preserve wealth and save taxes Advisor
Regular reviews to insure documents are current
Family involvement Healthcare
Work with existing attorney or Other
Expert
establish new relationship
Insurance
Agent
12. Employers partner with us to be their single,
expert resource for all of their employee benefits.
For more information, call 800.436.6689 or email
referral@sentinelgroup.com.
