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Plan
sponsors are typically concerned with two investment
activities: fund selection and fund evaluation or
monitoring. Although it may seem pretty
straightforward, the process used to execute these tasks
can be quite daunting.
Helping your client(s) establish procedures for their
investment decision making – and documenting those
procedures in a written Investment Policy Statement (IPS)
– is an important added value that you can bring to the
table. An IPS will help clearly define a plan’s
investment objectives and provide the basis for building
a sound fiduciary process, allowing plan sponsors to:
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Evaluate and monitor the plan’s investments using
well-defined criteria
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Provide documentation of the decision-making
processes with respect to selecting and monitoring
the plan’s investments
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Ensure consistency and continuity of process as plan
fiduciaries change
As
you work with your clients to develop an appropriate IPS,
encourage them to refer to it often and to incorporate
it to guide their investment decision making.
A
thoughtfully crafted IPS is an important first step in
your client’s investment decision-making process.
Whether it’s fund selection or fund monitoring, having a
map to guide the plan sponsor serves as a good
foundation for a sound fiduciary process that is
consistent and well-documented from beginning to end.
For
more information about Diversified Investment Advisors,
please contact Peggy Santhouse at 888-401-5342 or via
e-mail at
psanthouse@divinvest.com.
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