The SAFE (Self-Assessment of Fiduciary Excellence) for Investment Stewards

The practices outlined in the SAFE are adaptable to all types and sizes of endowments, foundations and charities and should:

• Help uncover investment and/or procedural risks not previously identified, which may assist in prioritizing investment management projects and reduce potential liability.
• Help to establish evidence that the fiduciary is following a prudent investment process and assist in establishing benchmarks to measure the progress of the investment fiduciary.
• Potentially help increase long-term investment performance by identifying appropriate procedures for:
  • Diversifying the portfolio across multiple asset classes and peer groups
  • Evaluating investment management fees and expenses
  • Selecting Investment Managers
  • Monitoring and reporting performance of Investment Managers
  • Terminating Investment Managers who are no longer are appropriate
• Serve as a reference for all parties involved with investment decisions (Investment Managers and Advisors, Accountants, and Attorneys) and provide an excellent educational outline of the duties and responsibilities of investment fiduciaries.

Investment Policy Statement (IPS)

This is the backbone of the investment process and the essential management tool for directing and communicating the investment activities of the portfolio by the investment stewards, and investment advisor. It addresses the mission of the organization, goals, time horizon, cash flow requirements, risk tolerance, acceptable investments, asset allocation mix, manager monitoring, due diligence criteria, and socially responsible investing guidelines if applicable. An added benefit is that it helps provide continuity when board member or director turnovers occurs and gives new members the educational background and tools to quickly familiarize themselves with the process.

Spending Policy Analysis

The McNicol Team* conducts a detailed spending analysis which takes into account current and/or proposed asset allocations, return projections, as well as incorporating inflation estimates to evaluate whether a spending policy is sustainable.

For most organizations the true challenge is determining and maintaining the correct investment mix, to achieve the highest risk-adjusted return that is in keeping with the organizations mission, IPS and fiduciary responsibilities.

Whether your investable assets have a finite life or are to run in perpetuity, ongoing monitoring of cash flows is conducted and reported to investment stewards so that they are aware of how spending, investment returns, inflation and fees paid impact the overall big picture.

Applying Science to Investing

Drawing on our strong technical background, The McNicol Team* applies science to investment management wherever possible. Using Modern Portfolio Theory as a foundation, they create a portfolio that maximizes performance and reducing risk while being sensitive to the fees charged. With the strength of Blackmont's open architecture IMA platform, they have the freedom to combine active and passive management as well as a multi-manager approach, all under a single consolidated reporting structure. The cornerstone of a prudently designed portfolio is that it is tailored to your organization's specific goals, objectives, time horizon and risk tolerance.

 
The comments contained herein are general in nature and professional advice regarding an individual’s particular tax position should be obtained in respect of any person’s specific circumstances.