Investment Manager Evaluation
We have a strong menu of investment options in our 401(k) Plan, right?
Ongoing monitoring of the investment options in a 401(k) Plan is a key responsibility of the 401(k) Plan Sponsor. Proper investment manager due diligence includes a quantitative review of past results PLUS a qualitative review of factors that may impact future results.
We assist 401(k) Plan Sponsors in evaluating managers based on both quantitative and qualitative factors:
Quantitative Factors
- Performance review versus benchmark index and peers
- Risk-adjusted performance analysis
- Holdings analysis
- Style consistency evaluation
- Fee benchmarking
Qualitative Factors
- Organizational structure change
- Manager change
- Investment process change
- Asset growth or decline
- Risk controls
- Compliance issues
We encourage our clients to maintain a “Watch List” of managers that fail to meet performance, risk, or style consistency parameters, or have had organizational or process changes that raise concerns about future results.
What are the limitations and benefits of quantitative analysis? What are the qualitative factors that historically have been associated with above average performance and below average risk?
Weems & Robertson can help you evaluate your 401(k) investment options in a manner that is consistent with best practices.