Multi-Step Institutional Consulting Process
The Mason Process
Step 1. Assessment – Assess the Current Situation
Whether your institution’s portfolio is new or established, it has unique characteristics that we need to understand in order to provide appropriate advice. We explore your investment goals and objectives, as well as expected cash flows, governing principles, growth expectations and spending requirements. We listen so that we can understand the unique characteristics that could affect the selection of investments and the advice you receive. For existing portfolios, we evaluate your current managers and funds and compare your current holdings to your asset allocation and the risk parameters in your Investment Policy Statement (IPS). We often find that some organizations have a policy allocation, but they do not actually follow the allocation in practice.
Step 2. Strategy – Design Strategy and Review the Investment Policy Statement
One of the primary fiduciary duties for finance and investment committees is to implement and monitor their organization’s IPS. At the beginning of each new institutional client relationship, our responsibility as advisors is to get to know the client. The best way for us to do so is to review and analyze the existing IPS. We have developed what we believe to be a “best practices” outline for an organization’s IPS, and we use this outline to lead our new client’s committee through the process of review and possible rewrite.
In most cases, our first meeting with a new client encompasses a fresh discussion of the goals and objectives of the organization. We challenge each element of the existing policy statement to assist in ensuring that it reflects the organization’s objectives, tolerance for risk, commitments and funding obligations. If appropriate, we will lead the process to establish an entirely new policy and will provide new policy drafts for the committee to review and approve. We spend significant time on the design of the spending policy, asset allocation and rebalancing plan and the manager due diligence criteria. On an ongoing basis, we will review the IPS as part of our biennial committee meeting and education plan and will attend each committee meeting prepared to answer questions and to recommend specific alternative courses of action supported by what we believe to be a rigorous analysis.
Step 3. Implementation – Implement the Portfolio
Our implementation plan will include managers and funds that we believe carefully match each recommended asset class and that pass our strict due diligence requirements for consistency of performance and style, as well as for cost effectiveness. As part of our process, we will review your existing managers against our criteria and identify those you may wish to maintain. Where appropriate, we may recommend investments in multiple managers or funds in a single asset class to benefit from the complementary approaches of these managers. For example, we may pair a manager who utilizes a concentrated strategy with a manager who does not while both invest in growth equities. We have found that this may provide the potential to enhance returns and reduce volatility, while still maintaining compliance with your IPS.
Please note that we only recommend third-party managers and funds. We do not have any proprietary products and do not plan to do so.
Step 4. Management – Monitor, Manage, Report and Educate
Once implementation is completed, we continually monitor your asset allocation parameters, managers and funds and your overall performance. For our OCIO (discretionary) clients, we will proactively rebalance your portfolio and hire/fire managers and funds per your IPS due diligence criteria. Each month and/or quarter, we will provide consolidated performance and accounting reports. We typically meet with our clients’ committees on a quarterly basis in person to review the reports and to provide education.
In this part of our process, we are able to assist you in the following:
- Consolidate information from most major custodians and provide timely, convenient reports.
- Reduce your internal reporting workload so you can focus on effective oversight.
- Proactively identify issues that require attention and recommend appropriate solutions that are consistent with your IPS.
- Track and review managers and funds monthly against our strict set of performance and qualitative criteria to provide timely indications of when a manager should be evaluated for possible replacement.
- Provide the committee and/or board with education on both timeless and timely investment-related topics. We know that your committee and board members change frequently so we have designed a set of education modules that we present on a rotating basis.
With the appropriate information, presented in a timely, comprehensible way, your committee is able to focus on policy and on ensuring compliance with that policy, while your staff is able to focus on your mission.
Click below to arrange an initial consultation.
Washington, DC Area Office:
Address: 11921 Freedom Drive, Suite 1000, Reston, VA, 20190
(703) 716-6000 (Phone)
(703) 716-6020 (Fax)
San Francisco Bay Area Communications:
(925) 365-1603 (Phone)
(925) 365-1756 (Fax)
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Investment Management and Financial Planning Services are provided by Mason Investment Advisory Services, Inc.
Mason Investment Advisory Services, Inc. is a SEC registered investment advisor and has an affiliate, Mason Securities, Inc., a FINRA Member Broker/Dealer (www.finra.org).
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