Investment Governance Blog

Wholesale v Retail

Will ERISA Trustees ever learn? or “I guess they aren't that smart at Princeton”

The Duty: An ERISA trustee is obligated to know who is being paid what by whom and whether the fees being paid are fair and reasonable. This duty is implicit...
Verify

When to Fire an Investment Advisor

Question: When, if ever, should a business manager recommend that their client fire their investment advisor? Answer: It will be time for your client to part ways with their investment...
Above Average

Bank v RIA as Investment Advisor: A Cost-Benefit Analysis

Many investors ask, "Is it better to have a big bank (Goldman Sachs, for example) as my investment advisor or a Registered Investment Advisor (Bel Air, for example) to manage...
Above Average

Why the “Passive vs. Active” Investment Debate is the Wrong Issue

The investment industry is embroiled in a "great debate" concerning which investment philosophy is best: active vs. passive management. The debate concerns how the building blocks (asset classes) that make...
Employee Review

Investment Governance Best Practices for Business Managers (How to Watch the Hen House)

The Problem:  You are a business manager(1), and it is either explicitly or implicitly the case that you are responsible for monitoring the activities of the investment managers that have...
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Does Size Matter?

Do "big investors" have better investment results than “small investors”? Many business managers expect that their wealthy clients with large portfolios ($25m+) should have better returns because the clients have...
Duty to Balance Risk and Return

A Business Manager's Duty to Monitor the Risk and Return of their Clients' Investment Portfolios

The Problem: You are a business manager and it is either explicitly or implicitly the case that you are responsible for monitoring the activities of the investment managers that have...
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Trust But Verify: Do Private Equity and Hedge Funds Deliver Superior Risk-adjusted Returns?

For several decades, the investment industry has promoted the virtues of hedge funds and private equity funds for large instructional investors and ultra high net worth individuals. But over the...
Verify

ERISA 1104(a)(1)(B) re Duty to Prudently Delegate

A trustee has a duty to prudently invest the plan assets on behalf of the beneficiaries. However, few trustees actually take on this complex responsibility alone. In most cases the...