Jason Gunkel, CFP®, CFA, CAP®, Chief Investment Officer
June 16, 2021
What goes on behind the scenes to manage the investment portfolios of our clients?
Join me for an inside look at the mechanics of our investment strategies headed up by our Investment Committee, a knowledgeable group of Syverson Strege employees who help navigate the investment world for our clients.
Many of our clients are aware we have an Investment Committee, but I am not sure how many know about its structure, responsibilities, and function.
Clients often review their investment statements to see the change in value. However, they might not understand the process of how the value of their portfolio changes. Our investment team works diligently to ensure that our investment strategies reflect our current research and are seeking to meet the risk and return targets of our clients.
Our Investment Committee currently consists of five members including Lance Gunkel, David Strege, Tyler Conley, Lance Knaack, and me. Members of the committee are chosen as those with specialty experience and knowledge in investments.
Lance, David, and I have earned the Chartered Financial Analyst (CFA®) designation, which is seen as the highest distinction in the investment management profession. It takes an average of 1,000+ hours of study and three rigorous exams, along with four years of professional experience, to become a CFA® charterholder. It is a highly selective process and fewer than one in five people who participate in the program earn the designation. Most CFA® charterholders work for large investment institutions, so it is relatively rare to have multiple CFA® charterholders work for one local financial planning firm.
The committee has a formal meeting every month in addition to our frequent ongoing communication. At the monthly meeting, we have a consistent agenda that is supplemented with discussion items that are topical for that particular month. We review the flow of investment dollars into and away from our management, which is a measure of the success of meeting client expectations.
We also share feedback from recent client meetings to discuss current concerns, ideas, or compliments from our clients. This helps us determine the areas where we need to focus our client communication and education efforts.
Each meeting we review a “market dashboard” that we have customized to look at the past, present, and predicted movements of the economy and markets. The dashboard has been created using multiple resources from our investment partners along with internal research to keep us focused on the most important aspects of the market.
So much data is available now which can be both a blessing and a curse. We find it crucial to separate the market “signals” from the “noise” so we are not distracted by the headlines that are often created by the media to stir emotional responses.
We review performance data for our investment strategies at every meeting. We evaluate the recent and long-term performance information for each specific investment in our strategies and compare it against both their peers and market benchmarks. We strive for consistent performance and will flag investments for additional due diligence for any that are underperforming, with more emphasis placed on longer-term performance. We then review the performance of our investment strategies as a whole and run an attribution analysis to determine the reasons for over and underperformance.
Each member of the committee is assigned to a specific asset class (U.S. Stock, International Stock, U.S. Bonds, International Bonds, etc.) that they are responsible for researching. In addition, a committee member will be assigned as the main contact with our various investment partners. The committee members present a report every quarter on their latest research and updates on their assigned asset class and managers.
Based on our market dashboard, performance review, and asset class reports, we will discuss if any changes are needed to our investment strategies. If we believe that a change could be beneficial, we will conduct a deeper analysis of the potential change and its effect on our overall strategies. We have very specific return and risk targets for each strategy and we can leverage various software programs that help us predict the effect of adjustments.
A key responsibility of the Investment Committee is to communicate our research and recommendations to both our financial planning team and clients.
We provide frequent updates to our financial planners who are responsible for selecting the investment strategies they deem most appropriate for their clients. We work in close collaboration with the planners and often participate in client meetings to assist with the selection of strategies.
The committee is also responsible for providing direct communication to clients, which includes monthly market updates, quarterly market videos, frequent blog posts, and mini-podcasts to be as transparent as possible with our current thoughts on the market.
Finally, our committee is responsible for implementation of our strategies. Once a strategy is chosen for a client, we conduct the trading inside the client account to purchase the investments. Managing Director Lance Gunkel serves as our primary trader and he is busy on a daily basis with trades that are required for contributions, distributions, strategy changes, and rebalances.
Doing the trading ourselves requires much work, but it has saved our clients significant fees instead of outsourcing to another company as other firms may do.
In summary, our Investment Committee is made up of people who have a passion for investing. We enjoy researching the markets and monitoring accounts on an ongoing basis so that we can help our clients meet their goals. Instead of laboring over their investment portfolio, our clients can enjoy doing other things!
If you’d like a complimentary, no-obligation, confidential consultation regarding your investment management and financial planning needs, call us at 515-225-6000 or use our contact form.