Press Release
2003 Investment Advisory Fee Report Made Available
LIGHTHOUSE POINT, FL, October 6, 2003 -- Benchmark Financial Services has just released "Examining Active Investment Advisory Fees: 2003 'Actual' Fee Survey of 100 Pensions." This report is intended to provide guidance to plan sponsors seeking to review the investment advisory fees they pay.
Understanding investment management fees is important in providing for the management of plan assets. This responsibility is ongoing. After careful evaluation during the initial selection, investment management fees and expenses should be monitored to determine whether they continue to be reasonable. To determine reasonableness, plan sponsors need to look at all aspects of plan costs and have a way to benchmark them.
"We believe this report, which is the first study of its kind, will be useful to plan sponsors in evaluating the fees they pay, as well as referred to by managers in pricing their services" said Ted Siedle, Founder and President of Benchmark Financial Services.
The report consists of two parts:
- Part A discusses issues regarding investment advisory fees that have arisen in connection with investigations Benchmark Financial undertook since 2002 on behalf of certain pension clients. It proposes a methodology for pensions to utilize in evaluating fees, as well as procedures pensions should consider for reviewing and negotiating fees with managers. The report also draw attention to specific practices, such as cash solicitation agreements, "soft dollars" and portfolio turnover rates, which can result in higher fees. Part A also discusses conflicts of interest in the investment consulting industry that may contribute to funds paying higher-than-necessary fees. Finally, it analyzes the myriad "most favored nation's" clauses utilized by funds and efforts by managers and funds to monitor compliance with such clauses.
- Part B provides data regarding "actual" fees paid by 100 pensions, by investment mandate and account size. Of the sample 100 funds, 59% are corporate; 22% are union and 19% are public funds. All funds have over $100 million in assets under management. Data is provided regarding large, mid and small cap equities, international, fixed income, real estate, private equity and venture capital.
The report can be ordered directly from Benchmark Financial Services by calling 954.360.0557.
About Benchmark Financial Services
Benchmark Financial Services, Inc. provides investment banking, securities brokerage and specialized consulting. Securities brokerage clients consist of some of the largest professional money managers and pension funds. Investment banking clients are typically small-to-medium size private companies. Consulting projects vary broadly to include financial product development, marketing of investment management services, portfolio-related problem solving, securities trading and investigations involving pension funds and their money managers. More information at www.benchmarkalert.com.
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