Investment Advisory

Fiduciary Review

As more focus shifts toward defined contribution plans and appropriate investments, what steps must the plan sponsor take to demonstrate compliance? Cowden Advisers, Inc. will walk plan sponsors through a thorough evaluation of their defined contribution plan to ensure that fiduciary practices follow the proper guidelines and that the best outcome is achieved for plan participants. We ask questions like:

• Do the plan fiduciaries know their respective roles and responsibilities and have they acknowledged their positions in writing?
• Does an Investment Policy Statement (IPS) exist? If yes, does the IPS contain all suggested content?
• What steps does the plan sponsor perform to demonstrate compliance with fiduciary best practices?
• How are meetings and other reviews documented?
• Are plan expenses clearly disclosed and understood and are they reasonable when compared to the level of services and general marketing practices?

An Accredited Investment Fiduciary Analyst can provide a thorough, independent review of all fiduciary issues and practices and can prepare a plan for certification through the Centre for Fiduciary Excellence (CEFEX).

Sample Fiduciary Issues We Cover

• Document Review
  Review of all documents that define your investment management authority
• Plan document
• Summary Plan Description (SPD)
• Loan policy
• Other policy and procedures governing the plan


• Review of Your Plan Compliance
• Annual return report of employee benefit plan (Form 5500), notices, etc.
• Adherence to plan document and policies
• Governing regulations


• Review of Your Current Advisors
  Review of current advisors assisting you in managing your plan
• Services promised versus services provided
• Cost identification and analysis, direct, hidden and termination costs
• Confidentiality, indemnification, vendor fiduciary status


• Review/Redraft Your IPS
  Your IPS should include a detailed process for determining:
• An appropriate asset allocation
• Criteria for selecting specific investments and managers
• Security and control guidelines
• Performance measurement criteria


• Review of the Procedures Used to Develop Your Asset Allocation Strategy (for Trustee Directed Plans)
• Review tools used in determining most appropriate strategy for your plan
• Analyze the relevance of inputs for risk, return asset class preferences, time horizon and capital market input used


• Review of Your Due Diligence Procedures
• Review the plan’s procedures for selecting/monitoring the plans investment vehicles, fund performance and appropriateness of fund or manager relative to your allocation strategy and against respective peer groups


• Expense Review
• Review fees, internal costs and the use of all soft dollars ("revenue sharing"), including each money manager’s best execution and proxy voting


• Documentation of Your Due Diligence Process
• Assist in developing a means by which you document your decisions and all relevant data, information and reasoning that you employ


• A Review of Recent Investment Activities
• Look for undisclosed conflicts of interest and other prohibited transactions that may have occurred


• A Review of Education and Plan Fiduciaries Regarding Responsibilities and Liabilities
• Plan document
• Summary Plan Description
• Loan policy
• Other policy and procedures governing the plan