PFA employs a multi-stage or phased approach to help investors and fiduciaries comply with prudent diversification standards:
- Portfolio assessment: low-cost screening tests to identify hidden diversification problems;
- In-depth, diagnostic procedures to pinpoint causes and recommend solutions;
- Help implementing recommended solutions; and
- Monitoring services and reporting on ongoing compliance.
In addition, we also offer Ad Hoc Fiduciary Compliance Consultation(1/2-hour consultation: $225; 1-hour consultation: $350.)
|Stage I |
|Stage II |
IN-DEPTH DIOGNOSTIC INVESTIGATION TO PINPOINT CAUSES AND RECOMMEND SOLUTIONS
|Stage III |
ASSISTANCE WITH IMPLEMENTION OF RECOMMENDED SOLUTIONS
|Question Answered:||Is portfolio prudently & reasonably diversified?||What changes must be made to bring the portfolio into compliance with diversification standards of 3rd Restatement of Trusts and UPIA?||What is the best way to implement the recommended changes?||Is the ongoing fiduciary requirement for periodic monitoring of a portfolio’s risk and diversification done and properly documented?|
|Purpose:||Identify extent Uncompensated Risk was removed from the portfolio, and see how it complies with minimum fiduciary standards.||To pinpoint causes of inadequate diversification and recommend solutions that bring diversification into fiduciary compliance.||To ensure implementation of recommended changes remediates the problems.||To provide documented evidence from a 3rd party that the fiduciary followed procedural prudence in managing the portfolio’s uncomp-ensated risk.|
|Description of PFA’s Included Services:||1. Calculate and measure the equivalent number of equally weighted diversification resources in the portfolio.|
2. Compare uncompensated risk removed by diversification to a “Reasonable” fiduciary standard.
|1. Prepare a comprehensive analysis of the portfolio’s Unsystematic Risk & Diversification.|
2. Identify root causes of the inadequate diversification and remediate their inadequacies.
3. Develop a separate and distinct prudent diversification strategy that will function as a prudent overlay to the return and overall risk strategy.
4. Draft addendum to Investment Policy Statement (IPS) adding strategy for managing uncompensated risk.
|On an as requested basis, we can provide help with implementation of any or all of the recommended solutions, as well as perform the following services, but only if desired by client.|
1. Help establish uncompensated risk metrics for portfolio.
2. Separately fine tune portfolio using asymmetric correlations and rebalance to achieve maximum diversification in accordance with IPS addendum.
3. Separately issue a written certificate addressed to the fiduciary, documenting that the diversification strategy implemented in the rebalanced portfolio is prudent and reasonable.
|Investigate and document fiduciary’s ongoing compliance to care, skill, and caution with respect to diversification by subjecting monitored portfolio to our intense 10-step monitoring and reporting process.|
|Deliverables:||A written report explaining results obtained and meaning.||A written report explaining results and detailing corrective measures needed to comply with fiduciary diversification requirements.||Help and Assistance only when Requested||Written Monitoring Report|
|Timing:||48 Hours||2-4 Weeks Depending on Portfolio’s Complexity||As Requested||Periodically|
|Fee:||$1,500 Fixed Fee*||Fixed Fee – Quoted in Advance||Hourly||Fixed Fee – Quoted in Advance|
*The $1,500 fixed fee is based on portfolios having 75 or fewer constituent securities with symbols. If a portfolio does not conform to the specified criteria, call 800-572-7574 to review your portfolio’s particulars with a team member and receive a firm price for our Stage I service.
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