As an independent investment consulting firm, Molewski Financial Partners has the objectivity to ensure its clients are getting excellent value for each component of the process—including investment planning, manager selection, performance reporting, custody and trading. Here’s how we do it.
Step 1: Develop an Investment Policy Framework:
- Develop and clarify investment goals and objectives
- Determine return requirements; calculate client-specific required rate of return
- Identify client’s downside risk tolerance (maximum one year loss)
- Understand client’s future funding needs and cash flow considerations
- Conduct a thorough review and analysis of current positions
Step 2: Design and Build the Investment Portfolio:
- Perform an Asset Allocation Study to determine appropriate broad asset allocation mixes (equities, fixed income, real estate, alternative investments and cash equivalents)
- Understand the risk/return characteristics of portfolio alternatives
- Design and recommend appropriate portfolio structure
- Develop a written Investment Policy Statement
- Develop portfolio transition analysis
Step 3: Research and Recommend Investment Managers and Custodian:
- Execute Investment Manager Selection process
- Select best-fit investment vehicles (i.e., actively managed separate accounts, mutual funds, and/or passively managed ETFs) to implement investment plan
- Review current custody arrangements and identify opportunities for operational and cost improvement
- Establish guidelines to control and account for all investment-related expenses
- Negotiate investment manager and custodian fees
- Identify appropriate benchmark and peer universe to monitor investment manager and portfolio performance
Step 4: Implement Investment Plan:
- Advise the client in official adoption of the Investment Policy Statement
- Select custodian, complete necessary account paperwork
- Hire investment managers and transfer funds to designated accounts
Step 5: Ongoing Portfolio Oversight:
- Monitor asset allocation mix and portfolio structure to ensure compliance with Investment Policy
- Recommend procedures for rebalancing as needed to maintain portfolio integrity
- Monitor portfolio/manager performance vs. benchmarks—perform holdings-based and returns-based
attribution analysis - Proactively manage the portfolio as required—introduce new investment styles, recommend asset class overweight/underweight positions based on economic and valuation analysis, recommend manager replacement as necessary, etc.
- Report performance: monthly, quarterly and/or annually.
