UPIA Compliant Trust Investment Management Services

Investment Management for Fiduciaries and Trustees

We’ve built our investment management process around the requirements of the Uniform Prudent Investor Act (UPIA). For trustees and fiduciaries, investing is an area with the potential for personal liability because of their duty to comply with the UPIA.

Obligations of the UPIA

  • Consider general economic conditions
  • Carry a duty to monitor
  • Identify the role of the investments in context of the overall trust and other resources
  • Understand needs for liquidity and determine the objective of preserving vs appreciating capital
  • Maintain duty to diversify the investments of the trust
  • Consider the effects of inflation or deflation over the long term
  • Manage assets in sole interest of the beneficiaries
  • Only incur costs appropriate and reasonable in relation to the assets
  • Consider the tax consequences of investment decisions or strategies

How Our Investment Management Practices Account for UPIA

We’ve found that both fiduciaries and individuals benefit from having these measures incorporated into the management of their assets. Here’s a look at the four core components of our approach.

Establishment of an Investment Policy Statement and Risk and Return Expectations

Investment Goals – We consider the role of the investments in the context of overall trust and other resources. As part of the initial onboarding process, we create an Investment Policy Statement (IPS) that identifies assets, objectives and goals. The IPS is then used as guidance for our investment decisions as we help you achieve your long-term goals.

Liquidity Needs – We also consider the needs for liquidity, and the preservation vs. appreciation of capital. Investment goals help define the appropriate level of risk that should be taken with the managed funds, whether that goal prioritizes the preservation or growth of managed assets. Within the IPS, we’ll provide an investment management recommendation that is consistent with your expectations for risk and return.

Our investment management services are sensitive to your liquidity needs, as we understand that required cash-on-hand can change based on circumstances. We help meet your liquidity needs either through income generated from the portfolio or cash being generated in an efficient manner. We will work with you to stay informed of financial changes that could lead to an updated investment recommendation.

Portfolio Investment Diversification

Diversification – Our portfolios are created and evaluated for diversification across asset classes, sectors, equities, interest rates, credit, and volatility. There are exceptions under unique circumstances, but we take care to avoid overconcentration in any specific area or single investment.

Risk & Correlation – As part of our portfolio creation and investment management process, we use Modern Portfolio Theory (MPT) concepts, such as correlation analysis, beta, and volatility, to monitor diversification and its impact on risk. MPT was founded on research demonstrating that investment risk is best managed at the portfolio level (as opposed to the individual asset level) through proper diversification of underlying assets.

Prudent Administration in Portfolio Management

Duty to monitor – We regularly monitor our portfolio’s performance and risk to ensure the investment is appropriate for your needs.

Consider general economic conditions – Analyzing a portfolio’s performance is not enough. Our investment management team regularly reviews fundamental economic conditions such as interest rates, equities, credit, and market sentiment.

Consider effect of inflation or deflation – We stay informed on inflationary or deflationary pressures in the economy. Our goal is to at least maintain or increase the real value (nominal value minus inflation) of your investment assets over the long term.

Consider tax consequences of investment decisions or strategies – A surprise tax bill is never fun. We know you are sensitive to the potential tax liabilities that can occur from selling or rebalancing investments. When appropriate, we help identify potential tax saving opportunities available within the portfolio.

Cost Management

Ensure overall costs are reasonable – Our portfolios are built to be low-cost. We work to ensure expenses are minimized by using zero-transaction fee securities and low expense ratio ETFs.

Additionally, we seek other ways to reduce your costs by eliminating ACH fees, IRA maintenance fees, and overnight check fees. We avoid commissions by operating under a fee-only fiduciary standard and our rates are competitive.