401(k) Specialist Issue 1 - 2016 - 25

CLIENT CONNECTION by Mario C. Giganti
Watching from Afar:
Client Meetings and the Quarterly Report
HOW OFTEN SHOULD advisors meet with plan sponsors, and what should they include in
the quarterly monitoring report? While it's a best practice to review investment options against
peer groups and benchmarks on a quarterly basis, it is not necessary to meet with every client,
every quarter.
The number of meetings you have with
MARIO C. GIGANTI
each client depends on a number of factors.
First and foremost, what was agreed
to with the client? If you're unsure, it often
depends on whether the plan sponsor is a
professional or an employer that " makes
something. " Professional practices, where
most of the plan assets are in the principal's
personal accounts, actually require
less meetings and typically occur annually.
When it's an employee-driven plan, more
meetings are initially necessary since the
plan sponsors feel a higher degree of fiduciary
responsibility for " managing someone
else's money. " While some meetings
can be done in a web seminar setting, most
are face-to-face and can occur quarterly,
semi-annually or annually.
''While some meetings can be done
in a web seminar setting, most are
face-to-face and can occur quarterly,
semi-annually or annually.
''
Regardless of whether there is an in-person meeting or not, a quarterly analysis should be
sent via e-mail or uploaded to the client account. There are two reasons:
1. It provides proof that the necessary investment benchmarking and due diligence has
been completed and no actions are necessary for the quarter in question.
2. It's another touchpoint and communication opportunity with the plan sponsor.
The information in the quarterly report also depends on a number of factors. For
off-meeting quarters, begin with a review of the market results for given periods of time.
This gives the reader an idea of what has occurred across many different asset classes
and prepares them for an analysis of investment options; this includes an analysis of the
investment options versus their respective investment policy statement objectives such as
its peer group and/or index. Since a global
fiduciary monitoring system is used at our
firm, any commentary for any investment
option is automatically included in the
report and any necessary " action " listed. If
there is an investment option that warrants
more conversation or change, a further
call-to-action or meeting would therefore
be necessary.
For the annual, semi-annual or quarterly
client meetings, I provide the following
information in the report:
1. Overview of any regulatory or
legal updates
2. Market review
3. Plan demographic overview
4. Plan asset roll-forward
5. Fee and expense breakdown and
benchmarking
6. Due diligence analysis using the
IPS criteria
7. Target-date and/or model
portfolio analysis
Some of the items listed above would be
considered " consulting " as opposed to investment
advisory services. If you already provide
or think you might want to provide some of
the above mentioned consulting services,
please discuss any required changes to your
agreements and related 408(b)2 disclosures
with appropriate legal counsel.
Mario C. Giganti is an owner and chief investment
officer of Cornerstone Capital Advisors, a fee-only
registered investment advisory Firm in Ohio. He
is also an adjunct faculty instructor for fi360, a
contributing author of the Prudent Investment
Practices for Investment Advisors and Stewards and
a CEFEX Registered Analyst.
ISSUE 1 2016 | 401kSpecialistmag.com 25

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