Institutional Services

  • Institutional Investors

    In today’s environment, there is greater volatility in the financial markets, an increase in governmental regulations and more complex financial instruments. Meridian assists our clients in constructing, implementing, and monitoring their investment plans to meet the challenges in today’s complex market environment.

     

    Meridian Wealth Management Advantage

    Meridian’s advice is independent, objective and provides access to the same investment solutions used by the largest financial institutions. Meridian’s core principles are:

    o   Independence – We have no products of our own to sell for commission, and we do not engage in any other business activities. This independence allows us to provide services in an unbiased manner.

    o   Objectivity – Our independence allows us to be objective in our analysis and recommendations to our clients.

    o   Innovation – We remain committed to pursuing ideas and disciplines that can help our clients achieve their long-term goals with confidence.

     

    Private Client Services

    Meridian collaborates with our clients to identify their investment goals, objectives, risk tolerance, return expectations and time horizon. We evaluate each client’s existing strategy from a risk-return trade-off and cost perspective. Only by fully understanding our clients’ goals and objectives can we effectively construct a comprehensive investment strategy.

  • Fiduciary Support

    Fiduciary Responsibilities

    A Fiduciary is someone who is managing the assets of another person and stands in a special relationship of trust, confidence, and/or legal responsibility (trustees and committee members).

    The UNIFORM PRUDENT INVESTOR ACT (UPIA) address the process fiduciaries must follow to be compliant with the ACT.
    Investment fiduciaries can be held personally liable if their conduct is deemed imprudent, so it’s important that they fulfill their responsibilities by consistently following a defined process. And keep in mind that liability is not determined by investment performance, but rather by whether or not prudent investment practices were followed.

    A prudent five-step investment process that complies with UPIA was developed and by the Practices & Standards for Investment Fiduciaries. Fiduciaries who follow this process are deemed to have acted in a prudent manner and are compliant with UPIA.

    The five-step process is:

    Analyze Current Position

    Fiduciaries need to know the standards, laws and trust provisions that pertain to investment management. They also must define the goals and objectives so that they are consistent with the portfolio’s resources and the constraints of applicable documents and statues. Fiduciaries and parties-in-interest must not be involved in self-dealing. Contracts should be in writing and should not contain provisions that conflict with standards of care.

    Diversify and Allocate Portfolio

    The second standard of care is to diversify assets to the client’s specific risk/return profile. Once a time horizon and risk/return profile has been established, the fiduciary can then make decisions on what asset classes are appropriate and the mix between investment classes.

    Formalize Investment Policy

    The investment policy statement is the most important function fiduciaries perform and should be considered a tool to manage the investment process in a consistent manner. The policy statement defines the duties and responsibilities of all parties involved; defines
    and due diligence criteria for selecting investment options; and defines the monitoring criteria for investment options and service providers, as well as the procedures for controlling and accounting for investment expenses. An effective policy statement should contain all material investment facts, assumptions and opinions, and should be used to direct and communicate the portfolio’s activities. It also establishes a rational basis for measuring fiduciary and portfolio compliance.

    Implement Investment Policy

    The fourth standard of care is to use prudent experts and document due diligence in the implementation of the policy statement. Although fiduciary law does not expressly require the use of professional money managers, a fiduciary will be held to the same standard of care as a professional. The suggested due diligence and “safe harbor” criteria include performance relative to peer group; performance relative to assumed risk; correlation to specific index; diversification of assets under management; holdings consistent with investment style; expense ratios and fees within industry ranges; and the organization’s stability. The policy statement should describe the process—which is managed by the investment fiduciary—and how it is to be documented. The money managers make investment decisions; it is the fiduciary’s duty to make sure practices are in place so that the overall process can be evaluated and monitored.

    Monitor and Supervise

    A fiduciary needs to monitor and supervise the investment process to control and account for investment expenses, monitor the activities of the prudent experts and avoid conflicts of interest and prohibited transactions. The monitoring function should occur across all policy and procedural issues, and not just as a function of investment performance. Periodic reports should compare investment performance with an appropriate index, peer group and to the policy statement’s objectives. Periodic reviews should be made of investment decision makers, specifically, whether there have been any organizational philosophy changes to the specific money managers or if there have been any legal or regulatory proceedings that may affect management.

    Plan Sponsors

    With the enactment of the Employee Retirement Income Security Act “ERISA” in 1974, trust fiduciaries for tax-qualified plans are required to observe ERISA’s “Exclusive Benefit Rule” and its ”Prudent Man Rule.” The “Exclusive Benefit Rule” of ERISA § 404(a)(1)(A) requires that a fiduciary discharge his or her duties with respect to a plan for the exclusive benefit of the plan participants and their beneficiaries and for the purpose of defraying the expenses of administering the plan. The “Prudent Man Rule” 404(a)(1)(B), requires that a plan fiduciary must discharge his of her duties with the care, skill, and diligence that would be exercised by a reasonably prudent person who is familiar with such matters.

    Diversification of plan assets is required under ERISA § 404(a)(1)(C) which places an affirmative duty on a plan fiduciary to diversify plan investments unless, under the circumstances, it is clearly prudent not to diversify, or, if not required under the Plan, where the Plan complies with ERISA § 404(c).

    Fiduciary Support

    We provide fiduciary support by:

    · Providing research and recommendations for traditional and alternative asset classes

    · Interpreting economic and financial developments in capital markets

    · Conducting educational presentations

    · Designing educational programs that enable 401(k) participants to make prudent investments

    · Demonstrating portfolio sensitivity to key assumptions.

    · Ensuring all plan expenses are fully disclosed

    · Manager Due Diligence and Selection

    · Risk Management

    · Performance Reporting

    · Asset Allocation Studies

    · Portfolio Construction

    Philosophy and Process

    Philosophy & Process

    ICG’s philosophy is that prudence is the foundation to our decision making process.

    Our comprehensive process is designed for fiduciaries who are charged with the responsibility of supervising their organization’s institutional investments and routinely make decisions related to the disposition of their organization’s professionally managed assets.

    Planning

    Review Current Investment Portfolio

    Review Current Documents

    Review Revenue Sharing Arrangements

    Review Current Expenses

    Investment Policies and Procedures

    Investment Policy Statement Design

    Portfolio Objectives

    Co-Fiduciary Responsibilities and Accountability

    Design

    Draft Investment Policy Statement (IPS)

    Determine Asset Allocation

    Portfolio Construction

    Manager Due Diligence and Selection

    Portfolio Rebalancing Parameters

    Asset/Liability Analysis

    Spending Policy Analysis

    Plan Design (DC, DB, Foundation, Endowments)

    Implement

    Asset Transfers

    Investment Policy Statement Objectives

    Manager Documentations

    Custodian Documentations

    Monitoring

    IPS Compliance Review

    Quarterly Portfolio Performance Review ( Absolute & Relative)

    Quarterly Manager Review vs. Peer Universe & Benchmarks

    Manager Attributions

    Annual Expenses

    Manager Due Diligence

    Manager Due Diligence Process

    Our due diligence process seeks to identify investment managers of different styles and asset classes who have demonstrated their ability in generating consistent long-term risk-adjusted returns. We apply both a quantitative and qualitative approach to selecting investment managers that is based on five key factors: Philosophy, Process, People, Performance, and Product Fit. We negotiate custodial and investment manager fees to ensure the best pricing available.

    Due Diligence Process

    Initial Screening

    Tenure
    Quantitative: Risk-Adjusted Returns
    Qualitative: Clear Investment Philosophy

    Size
    Quantitative: Statistical Data & Ratios
    Qualitative: Clear Investment Process

    Expenses
    Quantitative: Style Consistency, Portfolio Diversification, Performance Attributes, Manager Growth
    Qualitative: Firms Infrastructure, Investment Team, Ownership/Compensation, Incentives, Performance, Compliance

    Quantitative

    Initial Screening Quantitative Qualitative

    Tenure Risk-Adjusted Returns Clear Investment Philosophy

    Size Statistical Data & Ratios Clear Investment Process

    Expenses Style Consistency Firms Infrastructure

    Portfolio Diversification Investment Team

    Performance Attributes Ownership/Compensation

    Manager Growth Incentives

    Performance

    Compliance

    Asset modeling

    Multi-Assets- Control Risk
    Multi-Styles – Portfolio Diversification
    Multi-Managers- Best of Class Managers

    Ongoing Monitoring

    Our monitoring process is rigorous and thorough, reviewing recommended managers to insure their continued adherence to their stated investment philosophy and process.

    Meridian’s Investment Approach

    Meridian’s Investment Approach

    We adhere to the best practices of investment management with the objective of strengthening the existing portfolio’s risk/return characteristics.

    Our asset allocation studies include the modeling of relevant liabilities. We examine asset classes not being currently deployed and assess their ability and likelihood of enhancing the portfolio’s risk/return characteristics.

    Meridian’s investment approach is to use Multiple-Assets, Multiple -Styles and Multiple -Managers:

    Multiple-Assets are used to control risk at the portfolio level, given that different asset classes have different risk and return characteristics.

    Multiple-Styles are used to ensure that strategic investment program remains appropriately diversified over time. No matter which style is in favor at any given time, multiple styles reduce risk and work towards more consistent returns.

    Multiple-Managers are the way Meridian uses a manager-of-managers approach within the investment products available. No matter what style is in favor at any given time, this complementary blending of manager’s style can reduce the portfolio’s risk and provide for a more consistent return through various market environments.

    Formalize Investment Policy

    The investment policy statement is the most important function fiduciaries perform and should be considered a tool to manage the investment process in a consistent manner. The policy statement defines the duties and responsibilities of all parties involved; defines and due diligence criteria for selecting investment options; and defines the monitoring criteria for investment options and service providers, as well as the procedures for controlling and accounting for investment expenses. An effective policy statement should contain all material investment facts, assumptions and opinions, and should be used to direct and communicate the portfolio’s activities. It also establishes a rational basis for measuring fiduciary and portfolio compliance.

    Implement Investment Policy

    The fourth standard of care is to use prudent experts and document due diligence in the implementation of the policy statement. Although fiduciary law does not expressly require the use of professional money managers, a fiduciary will be held to the same standard of care as a professional. The suggested due diligence and “safe harbor” criteria include performance relative to peer group; performance relative to assumed risk; correlation to specific index; diversification of assets under management; holdings consistent with investment style; expense ratios and fees within industry ranges; and the organization’s stability. The policy statement should describe the process—which is managed by the investment fiduciary—and how it is to be documented. The money managers make investment decisions; it is the fiduciary’s duty to make sure practices are in place so that the overall process can be evaluated and monitored.

    Monitor and Supervise

    A fiduciary needs to monitor and supervise the investment process to control and account for investment expenses, monitor the activities of the prudent experts and avoid conflicts of interest and prohibited transactions. The monitoring function should occur across all policy and procedural issues, and not just as a function of investment performance. Periodic reports should compare investment performance with an appropriate index, peer group and to the policy statement’s objectives. Periodic reviews should be made of investment decision makers, specifically, whether there have been any organizational philosophy changes to the specific money managers or if there have been any legal or regulatory proceedings that may affect management.

    Plan Sponsors

    With the enactment of the Employee Retirement Income Security Act “ERISA” in 1974, trust fiduciaries for tax-qualified plans are required to observe ERISA’s “Exclusive Benefit Rule” and its ”Prudent Man Rule.” The “Exclusive Benefit Rule” of ERISA § 404(a)(1)(A) requires that a fiduciary discharge his or her duties with respect to a plan for the exclusive benefit of the plan participants and their beneficiaries and for the purpose of defraying the expenses of administering the plan. The “Prudent Man Rule” 404(a)(1)(B), requires that a plan fiduciary must discharge his of her duties with the care, skill, and diligence that would be exercised by a reasonably prudent person who is familiar with such matters.

    Diversification of plan assets is required under ERISA § 404(a)(1)(C) which places an affirmative duty on a plan fiduciary to diversify plan investments unless, under the circumstances, it is clearly prudent not to diversify, or, if not required under the Plan, where the Plan complies with ERISA § 404(c).

    Fiduciary Support

    We provide fiduciary support by:

    · Providing research and recommendations for traditional and alternative asset classes

    · Interpreting economic and financial developments in capital markets

    · Conducting educational presentations

    · Designing educational programs that enable 401(k) participants to make prudent investments

    · Demonstrating portfolio sensitivity to key assumptions.

    · Ensuring all plan expenses are fully disclosed

    · Manager Due Diligence and Selection

    · Risk Management

    · Performance Reporting

    · Asset Allocation Studies

    · Portfolio Construction

    Asset Allocation

    Asset Allocation

    Asset allocation, according to academic studies generates more than 92% of a portfolio’s long-term return. We take into account your current and future obligations, cash flow requirements, time horizon and risk tolerance to construct your portfolio.

    For defined benefit plans, ICG performs asset/liability studies utilizing actuary assumptions in our allocation models. For foundations and endowments we examine the organizations spending policy and incorporate into an asset allocation strategy.

    Investment Policy

    Investment Policy Discussion

    What Is an Investment Policy Statement?

    The Policy outlines and prescribes a prudent and acceptable investment philosophy and defines the investment management procedures and long-term goals for the organization and its assets.

    The Need for a Written Policy

    The principal reason for developing a long-term investment policy and for putting it in writing is to protect investment portfolio’s from ad hoc revisions of a sound long-term policy. The written investment policy will help maintain an organizations long-term policy when short-term market movements may be distressing and the policy is in doubt.

    Having and making use of an investment policy encourages fiduciaries to become more disciplined and more systematic, thus improving the probability of satisfying an organizations long-term investment goals and objectives.

    ICG’s Investment Policy Statement construction and implementation, ensures that fiduciaries successfully reduce their fiduciary liability related to applying a prudent process in the management of their organization’s professionally managed assets.

    ICG’s designs comprehensive Investment Policy Statements that encompasses the following elements, which ensures fiduciaries consistently follow a prudent investment process.

    Investment Policy Discussion

    Statement of Purpose for the Plan

    Statement of Purpose for the Policy

    Organizational Information

    Statement of Responsibilities

    Committee/Trustee

    Investment Managers

    Investment Consultant’s

    Plan Service Providers

    Investment Philosophy

    Investment Goals & Objectives

    Time Horizon

    Risk Tolerance

    Return Expectations

    Asset Allocation

    Asset Classes and Styles

    Return Expectations

    Rebalancing Procedures

    Adjustment in the Target

    Frequency of Review

    Liquidity

    Marketability of Assets

    Diversification

    Permitted Asset Classes

    Permitted Security Types

    Prohibited Asset Classes and/or Security Types

    Fund Manager Due Diligence Process

    Ongoing Due Diligence

    Investment Monitoring and Control Procedures

    Reports

    Meetings and Communication

    Qualified Plans

    Qualified Plans

    Meridian offers a specialized level of support to the employers and fiduciaries through a system of ongoing planning and investment support. We are committed to keeping you and your employees informed about investments and the benefits of sound retirement planning.

    Meridian combines the latest technology with a strong foundation of experienced pension and retirement plan professionals. We assist Fiduciaries in meeting your fiduciary responsibilities by choosing a diverse range of investment options and monitoring the plan for transactions prohibited under ERISA.

    As part of its role, Meridian provides a comprehensive collection of services for qualified plans, which include:

    Define objectives and risk constraints
    Prepare and implement a customized written investment policy statement
    Recommend appropriate asset classes
    Manager due diligence and selection
    Customized 401K platform
    Objective review of alternative investments
    Ongoing monitoring of funds and managers
    Reporting
    Review and control plan expenses

    Organizations Serviced

    Organizations Serviced

    Meridian’s Institutional Consulting Group provides fiduciary oversight to a full spectrum of organizations:

    Defined Contribution Plans
    Multi-Employer Plans
    Defined Benefit Plans
    Financial Institutions
    Foundation
    Taft Hartley
    Endowments
    Unitized 401(k) Platforms
    Health Care Organizations
    Participant Directed 401(k) Plans
    Corporate Operational Funds