HomeMy WebLinkAboutRESPONSE - RFP - P926 PUBLIC SECTOR RETIREMENT PLAN INVESTMENT CONSPOUDRE FIRE/AUTHORITY
401(A) PLAN
PROPOSAL FOR INVESTMENT
CONSULTING SERVICES
March 12, 2004
Innovest Portfolio Solutions LLC
8301 East Prentice Avenue, Suite 300
Greenwood Village, CO 80111
(303) 694-1900
standards for exemplary regulatory and compliance history, a focus on investment
management consulting, significant experience and assets under advisement. Most
importantly, Rich's business had to represent the highest form of integrity and
achievement within the financial services industry.
Rich has earned the designation of Certified Investment Management Consultant (CIMC)
from the Investment Management Consultants Association (IMCA), one of the
investment management consulting industry's educational accreditation organizations.
Rich has been on the Board of Directors for the ICIMC and is active with the Western
Pension and Benefits Conference. He has a degree in Business Administration from
Western State College.
Rich has been a frequent author on fiduciary and investment related matters. His works
and thoughts have been published in Financial Advisor Magazine, Private Asset
Management, Defined Contribution News, The Investment Councilor, On Wall Street,
Colorado Lawyer, Pension World, Journal of Compensation and Benefits, Colorado
Society of CPA's News Account, Registered Rep, Quarterly Forum, Pension &
Investments, The Denver Post, Accounting Today, Senior Consultant, Plan Sponsor and
The Denver Business Journal. Additionally, Rich has been a guest lecturer at the ICIMC
National Conference, University of Denver Graduate Tax Program, National Jewish
Estate Planning Conference, the Callan IMC National Conference, the Colorado Public
Pension Conference, the Western Pension & Benefits Conference, and the Mountain
States Employers Council, among others.
Rich sat on the National Planned Giving Advisory Council for the National Jewish
Center for Immunology and Respiratory Medicine, was on the Greenway Foundation
Steering Committee, is on the Citywide Banks Advisory Board and is currently the
President of Legatus of Colorado, an organization fostering business ethics.
Wendy J. Dominguez, MBA, Principal
Wendy is a Principal, and co-founder, of Innovest Portfolio Solutions LLC. She has over 12
years experience in the investment consulting profession. Wendy is responsible for client
consulting and the operations of Innovest including client coordination with money
managers, custodians, administrators, auditors and actuaries. She oversees performance
reporting, client projects, retirement plan vendor searches and money manager searches as
well as the financial and human resources operations of Innovest.
Prior to forming Innovest, Wendy was Manager of Client Services with the Investment
Management Consulting Group of Dain Bosworth (formerly RPRime Services of Rauscher
Pierce Refsnes). Wendy was responsible for manager analysis, asset allocation
development, performance analysis, and defined contribution coordination as well as
employee communication.
Wendy has written numerous articles for plan sponsors and their employees on topics such
as Department of Labor scrutiny, inflation, asset allocation, retirement planning, dollar cost
averaging, social security, and common myths about investing. She has also authored a
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number of articles for Investment Insights, an Innovest publication, on fiduciary and
employee related matters.
Wendy is a member of the Institute for Certified Investment Management Consultants
(ICIMC) and Western Pension and Benefits Conference. She has a BS in Finance and
Economics (Magna Cum Laude) and an MBA from the University of Denver. She is an
active volunteer with the Colorado Police & Fire Memorial Fund.
Brad Brewer, CPA, CEBS, Vice President
Brad is Vice President and a consultant with Innovest. He has over 11 years of
experience in consulting, concentrating on both investment and administrative issues
surrounding retirement plans, trusts, and taxable accounts. He is primarily focused on
providing client service, evaluating retirement plan service providers, and new business
development.
Prior to joining Innovest, Brad was a tax manager in the Denver office of Arthur
Andersen LLP, a big 5 public accounting firm. He assisted clients in establishing
procedures to meet fiduciary obligations, evaluating retirement plan providers, and
negotiating sanctions with the IRS. Previous investment experience involved setting
strategic asset allocation for taxable and non-taxable investment clients as well as
evaluating investment manager performance.
Brad is a graduate of the University of Arkansas at Little Rock (magna cum laude) with a
B.S. in Accounting, is a Certified Public Accountant (Arkansas), and holds a Certified
Employee Benefits Specialist from the University of Pennsylvania's Wharton School of
Business and the International Foundation for Employee Benefits.
He is an active member of the Western Pension and Benefits Conference and Colorado
chapter of Certified Employee Benefits Specialists. He has also presented at the
University of Denver's Accountants Education Series for CPE and authored articles for
Investment Insights, an Innovest publication addressing fiduciary and investment issues.
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Additional Key Professional Profiles
Brian P. Cunningham, CFA, Principal
Brian is a co-founder and Chief Investment Strategist at Innovest Portfolio Solutions
LLC. He has over 18 years of experience in the investment management profession and
has personally provided investment management consulting services to numerous
institutions and high net worth individuals. He is responsible for client consulting,
specializing in strategic planning and research.
In 1990, Brian founded RPRime Services, the institutional consulting division of
Rauscher Pierce Refsnes, Inc. RPRime provided sophisticated consulting services to
clients of the firm's financial consultants and investment banking professionals. Brian
was responsible for establishing numerous strategic alliances which resulted in improving
the quality and depth of product due diligence. He was in charge of strategic planning and
in addition to his administrative duties, Brian provided investment management
consulting services including strategic asset allocation and implementation.
In 1999, Brian was honored as one of the financial services industry's "best and
brightest" for his pioneering work in advancing the practice of investment management
consulting. This distinction places Brian in the top percentile of more than 150,000
financial professionals in the U.S. and Canada. Brian is one of only 92 consultants
elected into the inaugural class of the Society of Senior Consultants. His election into the
Society places him among the elite group of investment management consultants who
advise $850 billion in assets or 8% of the $10 trillion in financial assets in the U.S. Brian
was nominated and elected by a national advisory board comprised of his peers. The
nomination process and criteria for election to the Society were exacting and included
standards for exemplary regulatory and compliance history, a focus on investment
management consulting, significant experience and assets under advisement. Most
importantly, Brian's business had to represent the highest form of integrity and
achievement within the financial services industry.
Brian has earned the designations Chartered Financial Analyst (CFA) and Certified
Investment Management Consultant (CIMC). He is a member of the Association of
Investment Management and Research and the Denver Society of Security Analysts. In
addition, he is a charter member of the Institute for Certified Investment Management
Consultants (ICIMC). Past duties for ICIMC have included: serving on the Board of
Directors, Chair of the Program Committee, Public Relations Committee, Finance
Committee and most recently serving as Treasurer. He earned his degree in Business
Administration from Colorado State University.
Brian has worked with numerous philanthropic organizations. He served on the Board of
Trustees for the Eleanor Roosevelt Institute and was a member of the finance committee.
Past activities also include serving as President and Board Member for the Caring for
Colorado Foundation, one of Colorado's largest foundations. He has also served on the
Colorado Advisory Council for the National Jewish Center for Immunological and
Respiratory Medicine and the Colorado Energy Assistance Foundation Leadership
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Committee. He has authored numerous articles and provided frequent lectures on
fiduciary and investment related issues. His works and thoughts have been published in
numerous periodicals including American City and County, The Denver Post, The Denver
Business Journal, Institutional Investor, Financial Planning, The Journal of
Compensation and Benefits, Medical Group Management Update, Pension World,
Registered Rep, Bank Marketing, and Financial Services Week.
William E. Fender, CPA, J.D., MBA, Principal
Bill is a Principal of Innovest Portfolio Solutions LLC. Bill has over 20 years of
experience in financial advisory services and tax consulting. In addition to investment
consulting for clients, he is responsible for ongoing analysis of tax and fiduciary related
issues.
Prior to entering financial services, Bill was a tax professional with Arthur Andersen &
Co. He provided tax consulting, financial analyses and compliance services to a
diversified individual, trust and estate, partnership, corporate and nonprofit client base.
In financial advisory services, Bill's emphasis has been investment consulting. In
addition, he has extensive experience in retirement, charitable, estate, business succession
and insurance consulting for high net worth individuals, businesses and nonprofit
organizations.
Bill has served as an expert witness in litigation involving the Uniform Prudent Investor
Act and the Employee Retirement and Income Security Act of 1974 (ERISA).
Bill is a Certified Public Accountant (Colorado) and an Attorney (Ohio). He earned his
B.A. in Accounting, with honors, from Ohio University. He earned his Master of
Business Administration from the University of Dayton and his Juris Doctor, with
honors, from George Washington University Law School.
Bill is a member of the American Institute of Certified Public Accountants and the
Colorado Society of Certified Public Accountants. He is an active member of the
Colorado Society of CPA's Personal Financial Planning Committee.
Bill is a member of the Regis University Planned Giving Council. He is also a member of
the Colorado Planned Giving Roundtable. He served on the Planned Giving Advisory
Council of the Cleveland Clinic Foundation, a nationally prominent research and clinical
hospital.
Bill was a group leader for the Callan Associates, Inc. Taxable Investor Task Force, a
research group focused on the design and implementation of investment portfolios for
taxable investors.
Bill has been a frequent lecturer and author on investment, tax and fiduciary related
topics. He has authored and presented numerous continuing professional education
seminars for Certified Public Accountants and Attorneys. His articles have been
published in The Journal of Investing, The Journal of Financial Planning, The Journal of
Private Portfolio management, Financial Consultant, Personal Financial Planning, The
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Private Market Report, Senior Consultant, The Monitor (Investment Management
Consultants Association), NewsAccount (Colorado Society of CPA's), The CPA Journal,
Nonprofit Colorado (Colorado Association of Nonprofit Organizations), Ticker,
Registered Representative, and Fiduciary Focus.
Cliff Stanton, MBA, CFA, Director of Research
Cliff has over eight years of experience in the investment industry, including investment
consulting and investment banking. At Innovest, Cliff manages the research analyst team
and is responsible for maintaining and implementing the Innovest Research Plan. Cliff
works closely with the Chief Investment Strategist on developing market research
opinions and strategies for clients. In addition, Cliff supervises the analysis of all
investment products and has direct evaluation responsibilities.
Prior to joining Innovest, Cliff was a Senior Analyst with INVESCO Private Capital,
Inc., where he was responsible for the evaluation of private equity partnerships and
assisted with the management of a series of private equity fund -of -funds. Previously,
Cliff was the Director of Research for Portfolio Management Consultants, Inc., where he
managed the investment process for a $5.5 billion separate account and mutual fund
program. Cliff also served as an Associate in the public finance division of Sutro & Co.
Incorporated's investment banking department, where he was responsible for structuring
and marketing municipal bonds and leases.
Cliff has earned the designation of Chartered Financial Analyst. He received his MBA
from the University of Colorado at Denver and his Bachelor of Science in Business from
Miami University in Ohio. Cliff has been a General Securities Representative (Series 7)
and a Uniform Securities Agent (Series 63). He is a member of the Association of
Investment Management and Research, and the Denver Society of Security Analysts.
Steve C. Preikschat, (CFA Level II Candidate), Senior Research Analyst
Steve has five years of experience in the investment industry. At Innovest, Steve is
responsible for the quantitative and qualitative analysis of separate account and mutual
fund products, and is a member of the Innovest Research Committee.
Previously, Steve worked as a Senior Analyst for the Advised Assets Group LLC
("AAG"), responsible for plan performance analyses and reviews, manager/fund searches
and investment policy development. Prior to joining AAGsM, he was a senior fund
analyst for Great -West, and performed fund evaluation and selection analysis. Prior to
joining Great -West, he worked for the Boeing Company as a Financial Analyst in the
Commercial Airplane Group.
Steve graduated from Whitman College, earning a B.A. in Economics with distinction.
He is a CFA Level H Candidate and has passed the Series 65 and 6 examinations. He
enjoys spending time with his wife Kerri, skiing and playing soccer.
Laura Hamilton, Client Service Manager
Laura has over 13 years experience in the investment industry. Prior to joining Innovest,
Laura was an accountant at the regional investment firm of J.C. Bradford in Nashville,
Tennessee. She provided service to all top-level executives regarding income tax
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preparation, partner benefits, and investment transaction research. Laura was also
involved in operations with the firm's private foundation.
At Innovest, Laura is the liaison between clients, their vendors, and other key
professionals. She also coordinates client asset transfers and investment transactions. In
addition, Laura has performed internal Innovest studies on client performance, client
costs, and client service.
Laura is responsible for research and reporting of client tax issues, year-end tax planning
statements, and annual tax summaries. On a quarterly basis she is also involved in the
production of specific client and participant performance reports. Laura attended the
National Tax Institute at the University of Illinois.
Andy Holman, (CFA Level I Candidate), Research Analyst
Andy is a graduate of Colorado State University and holds a Bachelors degree in
Business Administration with a concentration in Finance & Real Estate. Andy was a
member of the Summit Student Investment Fund at CSU and was named 2002
Outstanding Finance Student of the Year by Financial Executives International, Denver
Chapter.
At Innovest Andy supports senior members of the Investment, Operations, and
Consulting teams by assisting with the analysis of investment products and capital
'markets, along with the production of quarterly performance reports and other client
service related projects.
Jamie McKnight, (CFA Level I Candidate), Research Analyst
Jamie is a graduate from the University of Colorado —Boulder (Magna Cum Laude) with
degrees in Economics and Mathematics. Prior to joining our team, he conducted research
and provided technical support for a prominent Denver law firm.
At Innovest, Jamie is largely focused on providing analytical support to the senior
members of the Investment, Operations, and Consulting teams. Specifically, he is
responsible for analyzing investment products and capital markets, and for producing
quarterly performance reports.
Donna Shearer, Portfolio Accounting Coordinator
Donna has over 20 years experience in the securities and money management industry.
Prior to joining Innovest, Donna was at RPRime Services, the investment consulting
department at Rauscher Pierce Refsnes (RPR). Prior to RPR, she spent considerable time
at E.F. Hutton and Shearson Lehman Brothers. Her experience includes portfolio
accounting, customer service and cashiering.
At Innovest, Donna's primary responsibility is supervision of the reconciliation of
hundreds of custodial statements and thousands of security trades performed monthly by
Innovest clients and their managers. Donna has a working knowledge of a large number
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of bank and brokerage custodians and their reporting and works directly with clients in
maintaining account -reporting accuracy.
Donna has the quarterly responsibility of producing the more complicated client custom
performance reports.
In addition, Donna is responsible for maintaining Innovest portfolio software and
coordinating all electronic delivery. Donna has successfully completed both series 7 and
63 securities examinations.
Margarita Hughes, Client Service Assistant
Margarita Hughes is a Client Service Assistant at Innovest Portfolio Solutions LLC.
Margarita is a graduate of Colorado State University with a Bachelor of Arts and a degree
in Liberal Arts.
At Innovest, Margarita has the responsibility of providing administrative support to the
firm's clients. In addition, she coordinates the firm's public relations and is editor of the
Innovest newsletter Investment Insights. She is responsible for developing proposals,
sales presentations and updating the Innovest web site (www.innovestinc.com).
She comes to Innovest with several years of customer service and human resources
experience. As an HR Coordinator at the Inverness Hotel and Golf Club, her duties
included new hire processing and orientation, applicant tracking, and assisting in
recruiting. Margarita honorably served 4 years in the United States Marine Corps as an
Aviation Supply Clerk and is a veteran of the Persian Gulf War.
Margarita is actively involved in her family's life and has coached soccer for the YMCA
and is currently coaching basketball for the Highlands Ranch Community Association.
Anita Potestio-Cunningham, Controller
Anita has over 17 years experience in the accounting profession with a focus on the
financial services industry. She has been working with Innovest and its related
companies since their inception. Anita's duties include overseeing all financial
accounting functions including production and analysis of financial statements,
budgeting, tax preparation and filing, accounts receivable, accounts payable and all
payroll functions. She is responsible for coordinating these services between all of the
firm's associated entities.
Anita is a graduate of Colorado State University with a Bachelor of Science in Business
Administration, major in Accounting.
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I. Background
Our History
The founding principals of Innovest trace their investment management consulting roots
back to the mid-1980's. Rich Todd and Brian Cunningham were pioneers in the
consulting profession and were recognized for their achievements in 1999 by the Society
of Senior Consultants. In addition to their joint consulting practice, Rich and Brian
founded the institutional consulting department at the boutique investment bank,
Rauscher Pierce Refsnes. With an objective to avoid any conflicts of interest and better
serve clients, Rich Todd, Brian Cunningham and Wendy Dominguez founded Innovest
on July 1, 1996. Unlike brokerage firms, Innovest is fee -only to ensure that interests are
aligned properly with clients. The Innovest foundation is based on excellent client
service, forward -looking innovative investment solutions, and performance powered by
people.
Our Team
Performance Powered by People. Analysis is important, but must be conducted by high
quality, experienced professionals. The five principals of Innovest alone have over 70
years experience advising numerous institutional and high net -worth clients. Innovest
has 20 employees, of which 11 are involved in investment research. In addition to
experience, our professionals have substantial expertise in designing, implementing and
supervising large multi -manager portfolios. Our team approach is designed to provide
depth in consulting experience and expertise, and to ensure continuity of service. In this
regard, Innovest has assembled professionals with experience in a variety of financial
disciplines. Please see Section V for biographies of our key professionals.
Our Investment Expertise
Assessing Risk(Reward From Every Angle. Our edge lies in our ability to analyze and
identify unique strategies and opportunities and integrate our distinctive risk management
process. As a firm, we are motivated to find highly talented, motivated and ethical
managers with a sustainable edge. Our contacts within the manager community, as well
as a manageable and controlled asset base, provide client's with access to niche
managers. Innovest will give the committee valuable insight regarding the manager's
people, process, risk controls, strengths and weaknesses. Moreover, our process of
decomposing manager strategies into their component risks results in the ability to
allocate to opportunistic managers while effectively managing overall portfolio risk
exposures. We believe the client benefits by expanding their opportunity set to managers
that can truly add value.
Innovest believes that while many quantitative and qualitative measures can be employed
to assess performance, ultimately the professional judgment of our analysts is paramount.
We do not believe that a black box can successfully choose managers that will
outperform going forward; we rely on our investment professionals to do so. Hence,
"Performance Powered by People."
Innovative Solutions. Our thinking is highly independent and we are driven to uncover
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innovative strategies and opportunities. Our process begins by analyzing the client's
objectives, preferences and constraints. Factors considered include preferences for
investment styles and strategies, fiduciary considerations and fit within the entire
portfolio. We then combine our unique risk analysis with rigorous due diligence to select
specific managers. Finally, Innovest monitors and supervises the portfolio on an ongoing
and opportunistic basis. Although the process is stringent, we differentiate ourselves from
others by our ability to incorporate an innovative thought process with forward based
analysis.
Why Retirement Plans Hire Us
Innovest delivers powerful, innovative investment solutions to retirement plan sponsors.
We understand the unique needs of public retirement plan sponsors. Our clients receive a
custom solution designed to exceed, not just meet their expectations. Innovest is the
public retirement plan expert and we use that expertise to equip retirement plan sponsors
to effectively manage their fiduciary liabilities in the areas of investments, plan
coordination, and cost control. Typically, our fees are paid of the plan as a plan expense.
• We are innovative. We are constantly looking for new, cutting edge vehicles or
approaches to increase client performance. We are focused on decomposing
managers and strategies and are committed to understanding their strengths and
weaknesses. We search for managers with a sustainable edge.
• We deliver results. Exceptional risk adjusted performance is our goal. We
quantify client characteristics and build solutions within those boundaries. We
have a steady hand, even in turbulent investment markets.
• We are a deep firm. We possess varying backgrounds and specialties,
encompassing investment consulting, alternative investments, estate planning,
financial planning, accounting, and law.
• We work as a team. We utilize the strengths and talents of our colleagues in
order to arrive at solutions that add value for our clients.
• We are fee only consultants. We are fee only consultants and believe that
commissions create conflicts of interest and misaligned incentives.
• We are employee owned. We are highly motivated to succeed and can only do
so if clients are raving fans. We abhor bureaucracy and are designed to be agile
and dynamic.
• We are advocates for our clients. We have the strength and knowledge in the
market place to secure custom solutions and negotiate lower costs.
• We maintain lone standine client relationships. Because of our leading edge
strategies and our dedication to quality service, we consistently exceed client
expectations.
II. Retirement Plan Approach
We are presenting two options for your consideration. One is to just benchmark the plan
against our database and FPPA. The second option is to receive competitive bids
(including FPPA) specifically for Poudre Fire and analyze the proposals.
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A. Option I - 401(a) Plan — Benchmark of Prudential, $12,500
Based on our findings, we will benchmark the plan against both our proprietary
database and specifically against FPPA. Innovest over the past few years has
conducted 22 vendor searches on behalf of clients. The Innovest Defined
Contribution Vendor database was developed while working for over 40 plan
sponsors and thousands of participants (smaller plans of $450,000 to larger plans
of over $500 million). In the database, the median client's plan size is $37
million with 475 participants. The database is the result of vendors' competitive
bidding to provide our clients retirement plan services, not a theoretical survey.
In the last few years, Innovest has taken 22 plan sponsors through the RFP
process, cataloguing over 100 proposals from near 40 different vendors in the
Innovest database.
We would conduct a detailed, diagnostic analysis of the 401(a) Plan recordkept by
Prudential. This analysis would include the following:
Investments
• Investment Product Classification. Style analysis is conducted to
determine appropriate benchmarks and style.
• Client Specific Analysis. Each investment product and its performance is
compared against your expectations.
• Performance Analysis. Performance of each investment product is
compared versus managers of similar style and the appropriate benchmark
over cumulative, annual, and rolling periods. Performance is also
evaluated on a risk -adjusted basis.
• Cost. Investment costs, including internal expenses and transaction costs,
are compared to the average mutual fund costs in the industry and
importantly, compared to pricing in the institutional marketplace.
Investment Option Structure
• Overlap of Style. Redundancy in style (i.e. Large Cap Growth) is
identified between investment options.
• Gaps in Style. Missing styles are identified that are ideal in designing
investment portfolios.
• Life Cycle Products. The need for fully diversified options is examined.
Administration
• Service Quality. The accuracy and timing of plan deliverables such as
reports and statements is measured. The responsiveness and the expertise
of the team assigned to the plan sponsor are evaluated.
• Technology Utilization. The quality, flexibility, and use (or lack there of)
of current technologies is analyzed. The
• nature of participant interaction with web sites and voice response systems
to access plan account data, plan for retirement and allocate plan assets is
evaluated.
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• Costs. The fees for plan administration are reviewed against Department
of Labor and Innovest benchmarks. Costs are analyzed for subsidies or
revenue sharing from investment expenses.
Education
• Quality and Content. The quality and content of the actual employee
communication materials is varied. We believe the plan sponsor should
take a step back and determine what their employee communication needs
are and then design a program to meet their unique situation. Due to our
consulting experience with retirement plan clients, we have witnessed a
wide spectrum of retirement plan providers' employee communication
capabilities. With our plethora of experience, we believe we are the
ultimate benchmark for employee communication programs and can be
invaluable to the plan sponsor in designing custom education programs.
• Delivery. Important areas to review include experience in both new
election periods and ongoing communication; typical process used in
communication; alternative means and samples; philosophies and biases
among others.
B. Option II - Develop RFP and Receive & Analyze Candidates $15,000 (limit
of 5 vendors. If additional vendors are included, the cost will be an additional
$2,000 per vendor.)
RFP Development & Services
Innovest has significant experience in assisting retirement plan sponsors in
creating Requests for Proposal, coordinating the effort, evaluating and
scrutinizing the candidates, and delivering a summary document to the client.
The Request for Proposal process is unique to each client's needs, expectations,
experiences, staff, time line, cost constraints, and legal issues. The first step is
building a custom request for proposal document that addresses the client's needs.
The second step is to identify a universe of vendors in which to send the proposal
on behalf of the client. The third step is to evaluate and scrutinize the candidates.
The fourth step is to develop a summary document to present to the client.
Typically, the areas that we analyze and provide objective guidance and expertise
include:
• Customer service. Important areas to review include financial stability, staff
size, qualifications, training and turnover, references and terminations, and
dedication and commitment to the industry among others.
• Recordkeeping. Important areas to review include: data editing and
manipulation, and format requirements; control, backup and recovery
procedures; system capacity, flexibility and its state of technological
development; ability to monitor regulatory limits and other technical
compliance facilities; and vesting/tax calculation utilities for benefits
distributions, and participant and plan level reporting features.
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• Administration. Important areas to review are: internet and voice response
capabilities; system operation hours and live operator availability; turnaround
times and benchmark standards on service items and transactions; data security
integrity and assurance levels; participant statement and form capabilities; and
employee educational capabilities among others.
• Participant communication. Important areas to review include experience in
both new election periods and ongoing communication; typical process used in
communication; alternative means and samples; philosophies and biases among
others.
• Investment options and investment products. Areas of importance include:
product availability and flexibility; customization capabilities; product
performance evaluation; recent portfolio of each product; history of products;
experience and tenure of managers; process and philosophy of each product.
• Plan compliance. The area of review scrutinizes the capability of the provider
to comply with the technical and regulatory provisions of the plan document
and benefit structures.
• Service Costs. Costs are usually all over the board and can be creatively hidden
by the vendor. Areas of review and evaluation include recordkeeping and
administration; product internal expenses, trading costs, loads, 12(b)l fees,
commissions and surrender charges; custody and transaction costs; employee
communication costs, internet, voice response, meetings, and statement
expense; GIC spread, market value adjustments and restrictions; cash handling
and fees; distribution and processing fees, conversion fees, fees charged in the
event of changes to plan; various other asset fees and participant charges among
others.
• Evaluation criteria. Some areas are important to some plan sponsors and
unimportant to others. Issues that are absolute are identified and can be used for
screening. Other areas are ranked or rated in importance. We recognize that
this process may be dictated by a plan sponsor's purchasing department.
However, we firmly believe that the evaluation process must be determined
before proposals are reviewed.
• Identifying and understanding conflicts of interest. Commissions, kickbacks,
referral fees, fee sharing, participant product and service sales are a few areas
that create conflicts requiring full disclosure and understanding. Additionally,
GIC providers and others with proprietary products may be motivated to
encourage participant allocation to those products. Provider relationships with
trustees, employees, and other vendors should be duly noted as well.
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III. Client List
Innovest Portfolio Solutions LLC has been actively involved with public retirement
plans, endowments and foundations, jointly administered and many corporate plans. Our
partial client list includes:
Arapahoe County
Aurora Fire Department
Aurora Police Department
Bismarck Fire Fighters Relief Association
Boulder Fire & Police Departments
Boulder Police "Old Hire"
Caza Drilling
CF&I Retirees VEBA
Colorado County Officials and Employees Retirement Association
State of Colorado Deferred Compensation
Denver Health and Hospital Authority
Denver Housing Authority
Denver Water Board
Holme Roberts & Owen
Littleton Fire Department
City of Longmont
Phelps Tointon
Pitkin County
Society of Economic Geologists
Steelworkers Health & Welfare Fund
Storage Technology Corporation
TIC Holdings, Inc.
Town of Vail
West Metro Fire Department
City of Westminster
We do not use performance -based criteria in determining which clients to include in this list. It is not known whether the
listed clients approve or disapproved of the services provided. This list was created using the following objective criteria:
25 largest retirement clients of Innovest.
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IV. Success Stories
We are proactive in every aspect of our investment related consulting. Our significant
experience in the retirement plan marketplace and specifically the public fund arena has
helped us design leading edge solutions for these clients. A few examples of the projects
that Innovest has completed for retirement plan clients include:
• Designed and delivered a three-day trustee workshop for a large metropolitan city
retirement board. Issues covered included asset allocation, fiduciary law and the
Colorado Uniform Prudent Investor Act, investment product evaluation, and
investment policy development.
• Handled the vendor re -negotiation of a $450 million 401(k) resulting in
significant improvements to their services and $100,000 annual rebate to plan to
cover other plan costs.
• Re -negotiated investment manager contracts for a large public safety pension plan
client, saving them nearly $100,000 per year in management fees.
• Designed a performance evaluation reporting system for a large multi -employer
plan that allowed for electronic delivery of performance information of their 15
manager team three weeks after quarter end.
• Assisted a Fire District 401(a) plan in developing an unbundled program with
separately accountable fund options, daily valuations, and voice response. The
unbundled environment significantly expanded the investment universe and
provided more flexibility to meet the changing needs of the participants or to
displace an ill performing component.
• Assisted a State's benefit's department design a Request for Proposal and evaluated
bundled providers as a defined contribution self -directed alternative to the State's
defined benefit plan.
Restructured the Investment Policy Statement, designed custom participant
communication, and introduced performance measurement for a City Money
Purchase Plan and 457 Deferred Compensation Plan. Additionally, custom "life
cycle" options were designed to make option selection easier and more meaningful
to plan participants.
• Analyzed specific mutual fund options in a bundled 401(k) Plan product for one of
Colorado's largest employers. Designed custom asset allocation guidelines for plan
participants. Negotiated agreement with vendor to use institutional share class
which saved client over $80,000 per year.
• Assisted a governmental retirement plan administration agency with the analysis,
evaluation, and selection of a comprehensive recordkeeping software system for
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11,000 participants. Reports were designed and improvements were made for
participant communication.
• Conducted a complete review of a pension plan of an agency regulated by the
federal government resulting in investment modifications, vendor contract
restructuring, and significant investment policy redevelopment. Vendor
constraints were loosened, costs were lowered, and plan provisions were
redesigned to be more favorable to participants.
• Renegotiated a contract for a large 401(k) plan sponsor with a full -service
provider that reduced proprietary product requirements and investment flexibility.
Reduced recordkeeping fees in excess of Innovest retainer fee.
• Performed expert witness work on a large number of high profile cases involving
investments, vendors, and fiduciary responsibility. Have significant expertise in
both state standards and federal impacting retirement plans.
V. Biouraphies
Our team approach is designed to provide depth in consulting experience and expertise, and
to ensure continuity of service. In this regard, Innovest has assembled professionals with
experience in a variety of financial disciplines. Three consultants will be assigned to the
Poudre Fire/Authority 401(a) Plan: Richard Todd, Wendy Dominguez and Brad Brewer.
Richard M. Todd, CIMC, Principal
Rich is a co-founder and manager of Innovest Portfolio Solutions LLC. He has over 18
years of experience in investment consulting and currently provides extensive consulting
services to institutions and individuals. His clients include public funds, corporate plans,
Taft -Hartley funds, and wealthy families. In addition to client consulting, Rich is
responsible for political and economic analysis and business development.
Prior to establishing Innovest, Rich was First Vice -President of Investment Management
Consulting Group of Dain Bosworth and Managing Director of RPRime Services, the
consulting department at Rauscher Pierce Refsnes. Rich's responsibilities included
consulting to the firm's top clients, coordination with other departments and
professionals, and department management.
In 1999, Rich was honored as one of the financial services industry's "best and brightest"
for his pioneering work in advancing the practice of investment management consulting.
This distinction places Rich in the top percentile of more than 150,000 financial
professionals in the U.S. and Canada. Rich is one of only 92 consultants elected into the
inaugural class of the Society of Senior Consultants. His election into the Society places
him among the elite group of investment management consultants who advise $850
billion in assets or 8% of the $10 trillion in financial assets in the U.S. Rich was
nominated and elected by a national advisory board comprised of his peers. The
nomination process and criteria for election to the Society were exacting and included