Uncovering the Truths in Investments

A panel of esteemed experts, including Kellen Foley, CFA, Jonathan Coombs, CPFA, and Tom Burnor, gather under the guidance of moderator Matt Giovinazzo, CFA, to delve into the intricacies of investment strategies. Drawing on twenty-five years of research, this session sheds light on three fundamental truths and highlights two critical danger zones in sales meetings. Join us as we uncover the two primary reasons responsible for 85% of your losses and explore the five phases of decision-making that shape investment outcomes.

• Matt Giovinazzo, Director, Investment Management
  
• Kellen Foley, CFA, Director, Investment Management
  
• Jonathan Coombs, CPFA, Senior Investment Advisor
  
• Tom  Burnor VP, Distribution Retirement Solution
  

The discussion kicks off with an exploration of general investments, focusing on the importance of scorecard analysis and fund consistency in assessing performance. Additionally, the panel delves into the potential cost savings associated with Collective Investment Trusts (CITs) and the nuances of lineup design. A comparison between Target Date Funds (TDFs) and DIY (Do-It-Yourself) approaches uncovers potential misallocations and glidepath suitability risks. The panel emphasizes that simplifying investment lineups is not always the solution; instead, it's essential to strike a balance between diversification and providing ample investment opportunities.

Moving on to defined benefit plans, the panel describes the benefits of an elite scoring system and emphasizes the significance of plan-specific cost analysis. By quantifying the costs associated with not utilizing scale advantages, businesses gain a clearer understanding of the potential drawbacks. Exclusive share classes and relationship pricing are also explored, highlighting the quantifiable consequences of overlooking scale advantages from both internal and external perspectives.

Shifting focus to target date funds, the panel highlights the risks associated with glidepath suitability and underscores the importance of customizing strategies based on plan-specific information. By considering employees' contribution rates, employer matches, and profit-sharing contributions, businesses can determine the appropriate glidepath risk posture. Pre-retirement TDF drawdown risks are also examined, emphasizing the need for personalized plan designs and effective risk management to mitigate potential losses during market downturns.

The session delves into the additional workforce costs that arise when near-retirement participants experience significant losses. Delayed retirement, increased wages, and healthcare expenses can impact employers, underscoring the need for robust risk management and investment strategies that align with participants' retirement goals.

Participant misfit risk is another critical aspect explored in the session. By quantifying risks and assessing replacement ratios, the panel provides insights into appropriate investment approaches for participants based on their individual circumstances and contributions.

Are you looking for more insights? Download the presentation here.

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