INVESTMENT CONSULTING SERVICES PROVIDED

One of the most frequently asked questions from clients of investment counselling firms is 'Is my manager doing a good job?'. It is a simple question, yet there is no simple answer. Usually the answer is that it depends on what the manager has been hired to do. For most clients, the answer is found in the Investment Policy Statement.

Board members and senior executives of non-profit organizations have a fiduciary duty to ensure that the investment capital under their care and direction is being properly governed and managed. Only through a strong foundation of good governance procedures can they fulfil this duty and properly manage their manager.

INVESTMENT POLICY EVALUATION AND DESIGN

Investment policy statements are often written by portfolio managers to reflect their areas of competency and biases after they have been retained by a client. At Rodgers Investment Consulting we seek to develop policy frameworks and guidelines that accurately reflect the objectives of the organization. As part of this investment policy design, we develop benchmarks and target rates of return that are realistic and appropriate to the policy and objectives. We will also address any legislation, such as the Trustee Act, that impacts the management of the investment portfolios.

PORTFOLIO GOVERNANCE AND PORTFOLIO MANAGER EVALUATION

We will develop portfolio governance procedures that will ensure the board of directors continue to meet their fiduciary responsibilities with regard to the prudent management of the organization's capital. This includes ongoing consulting services and, when practical and appropriate, the structuring of volunteer committee mandates. These governance procedures will include the frequency, method and style of reporting by the manager, terms of reference for any committees and conflict of interest guidelines. Evaluation criteria are developed that reference both appropriate market benchmarks and appropriate relative universes. These criteria are always based on the specific unique objectives of the organization and its own investment mandate. It will also include the procedures to be used and the appropriate criteria to consider in selecting a manager for the first or subsequent time.

PORTFOLIO REVIEW AND EVALUATION

We will undertake a review of the current portfolio and conduct a complete performance evaluation. Particular attention is paid to the existing policy and evaluation framework and we seek to answer two questions. The first is 'has the portfolio been managed in accordance with the mandate given by the board of directors?' The second question we seek to answer is 'has the portfolio been managed with an acceptable degree of professional competence within that mandate?'

INVESTMENT MANAGER SEARCH

When appropriate, Rodgers Investment Consulting will conduct a search for an investment manager. The criteria for consideration of managers will flow from a thorough evaluation of a client's needs and the resulting Investment Policy Statement. We will identify both the quantitative and qualitative needs of the organization. The quantitative needs are normally focussed on the requirements for current income and capital appreciation. The qualitative needs can be impacted by the service requirements or special considerations involving ethical and cultural values of the organization or the community.

After assessing both aspects of a client's requirement, we can then begin to evaluate potential managers against the objective criteria that have been developed with the board of directors and senior executives. Firms are invited to make submissions through a Request for Proposal process. The responses are evaluated against the selection criteria previously established and a short list of managers is recommended for interviews.

When evaluating investment firms, we again use both qualitative and quantitative criteria. The qualitative criteria focus on the firm and its own management capabilities. Consideration is given to the breadth, depth and tenure of professional staff, the growth rate of the firm and its own business plan, as well as the type of clients they serve. The qualitative aspects of the analysis focuses on the investment philosophy and process of the firm, the portfolio construction and delivery of the investment management and, of course, on the resulting historical performance profile of the firm.

Our role during the final selection process is to ensure that the board has the objective information they require to make the decision that is most appropriate for their organization.

FEES AND COMPENSATION

Rodgers Investment Consulting is a fee for service firm only. Our fees are quoted based on the time involved to complete each project and are not impacted by the size of the investment portfolio. No finders fees or commissions are accepted from investment managers.

Each client will be quoted a fee at the start of a project and that fee will be fixed unless the client significantly changes the mandate.

Billing arrangements and frequency are determined based on the scope and nature of each assignment.

• CHARITIES, FOUNDATIONS AND ENDOWMENTS
• ABORIGINAL COMMUNITIES