Investment Approach:Retirement Plan Services

Investment Approach:Retirement Plan Services

RETIREMENT PLAN SERVICES

We provide a unique all-encompassing approach to Qualified Retirement Plan Services for Plan Sponsors. We advise Business Owners and their employees as they plan for retirement and a life beyond work.

Our retirement plan services include the following:

  • Plan Design/Documents/Consulting – Initial and ongoing plan design consultation and optimization. Drafting of sponsor and employee plan documents.
  • Investment Management/Advice – Discretionary investment fiduciary services – ERISA 403(a) discretionary trustee, ERISA 3(38) investment manager and ERISA 3(21) investment advisor. Annual, semi-annual or quarterly Plan Sponsor investment committee meetings.
  • Record Keeping/Administration/Compliance – Daily record keeping, quarterly participant statements, annual compliance testing and government reporting.
  • Enrollment/Education/Advice – Initial and ongoing group employee enrollment and education meetings. One on one meetings with participants – financial education and advice.
  • Account Access & Information – Internet access to accounts. Quarterly participant statements. Daily investment changes and transfers. Targeted employee communications.
  • Tools and Resources – Calculators, worksheets, articles, blogs, videos available. Financial planning software. Access to Certified Financial Planners. Spanish language line and interpretation.

The investment platform for our retirement plan clients varies based on the level of engagement. We operate as an ERISA Investment Manager for Defined Benefit Plans and Employer-Directed Profit Sharing Plans. In addition, for Participant-Directed Defined Contribution Plans we generally include three levels of investment offerings. We believe this level of choice and the depth of each offering provides the highest level of fiduciary protection and options for our clients’ employees.

Do-It-Yourself: Roster of Mutual Funds

  • An array of top-notch Mutual Funds managed by several mutual fund companies.
  • Appropriate for investors who feel comfortable designing their own portfolio. Trust Company selects and monitors funds to achieve a well-rounded, high quality line-up of fund choices.

Professionally Managed: Guided Portfolios

  • Four Risk-Based Asset Allocation Portfolios managed by Trust Company.
  • Appropriate for investors who understand the level of risk they seek but are not comfortable constructing a portfolio. Globally diversified asset allocation managed by Trust Company.

Professionally Managed: Target Date Funds

  • Twelve Age-Based Funds managed by a top-rated target date fund manager.
  • Appropriate for investors who are not sure how much risk to take. Participant selects a fund based on his or her age. Risk automatically decreases as participant nears retirement age.

 

OVERVIEW - INVESTMENTS

The investment landscape is complicated. Talking heads espouse their views frequently, often times contradicting each other or even themselves. These talking heads are often selling airtime or hyping up their own investment positions, so is it any wonder their views are often attention grabbing and even hyperbolic? This leaves clients wondering or developing views that may not always be helpful. At TC Wealth Partners and Trust Company of Illinois, we “Reed Between the Lines” to help make sense of the noise and create an individualized plan that works for you. We promise to have a view and be objective in the delivery of our advice.

We provide thought leadership in a variety of means. Please read our quarterly market commentaries and our investment blog “Reed Between the Lines.”

Investments Overview

Behavioral Finance - Wealth and investment management is an art and a science.

Realizing that markets are a compilation of humans with a variety of conscious and unconscious biases is critical. Furthermore, psychology and behavioral finance shows us that individuals are also subject to emotional and physical stimulus that can hinder our cognitive abilities. This can and often does lead to poor decision making without a disciplined framework and the guidance of a seasoned investment advisor supported by a variety of checks and balances. This work is so profound that many people have won Nobel prizes in economics for work in this field called behavioral finance, including Daniel Kahneman, Richard Thaler and many others. The concepts and pitfalls are highly omnipresent in our ability to help set and manage clients’ expectations on the path to their definition of success.

 

CORE INVESTMENT PRINCIPLES

We believe that our core investment principles serve as a foundation for better understanding you, providing insights that matter to you, that then allows us to be more intentional together in the management of your wealth. These principles help us avoid the pitfalls of behavioral finance and create a customized plan that works for you.

Goals Based Investing

Whether you are an individual or an institution, your goals are your purpose for investing. Return expectations, risk tolerances, income needs and timelines are guide rails for determining your asset mix. In our retirement plan offerings, you may have the opportunity to select your funds by asset class or determine a predefined diversified portfolio that has already been created based on different levels of risk, and in some circumstances a pre-determined retirement date.

Forward-Looking Expectations (For Trust Company of Illinois risk-based Guided Portfolios)

Market behavior is driven by fundamentals, valuation levels and sentiment. These three pillars are impacted by a slew of factors including monetary and fiscal policies of nations. Thus, it is important to be forward-looking regarding cause and effect influences on market behavior.

Why is this so important? For example, the domestic fixed-income market has been on a 35-year bull market of declining interest rates. To simply assume historical returns will be the same going forward is simply erroneous and can create bad outcomes for those planning on and needing stability in the income they need from their assets. Instead, we believe it important to have a point of view on the causes and effects of various factors, so that we can create a more prudent picture of the future and how to invest accordingly.

Asset Allocation (For Trust Company of Illinois risk-based Guided Portfolios)

Diversification is key, whether it be across asset classes or across account types and registrations. Like the pendulum on a clock, investors sway between being overly optimistic and pessimistic around long-term averages. Be cognizant of extremes in combination with cause and effect factors.

We believe that asset allocation is a critically important decision in constructing an investment portfolio. As such, we provide a variety of asset allocation recommendations (i.e., guided portfolios) that are based on varying levels of risk and return expectations (i.e., investment objectives). The asset classes that we include are thoughtfully selected based on the contributions that they can provide to a broadly diversified portfolio over short- and long-term perspectives. The combination of these return expectations at the asset class level with historical risk and correlations considerations allow us to build better financial planning and asset allocation modeling services. We believe that these forward-looking perspectives allow us to provide differentiated investment advice compared to others that may only consider historical return perspectives.

Portfolio Construction (For Trust Company of Illinois risk-based Guided Portfolios)

This may be the most overlooked facet of overall portfolio management. It can help create desired outcomes with a higher degree of probability. Some markets are more efficient than others. Depending on your goals, be willing to pay for active management, certainly in less efficient asset classes. While indexing may provide for cheaper expenses, you will get the same level of return, risk and income as the index. Your goals may dictate more or less of each.

So, should I just index everything? The answer misses the point of the question. Determining whether you should include active or passive management strategies is an active decision and should be based on your needs, preferences, asset classes needed to help you fulfill your goals, and so many other things. We recommend that you simply walk away from anyone that dogmatically preaches one approach or another.

Disciplined Buy & Sell Framework

The investment world is littered with pitfalls, most of which are based in mental heuristics attributed to the field of behavioral finance. A focused effort on understanding elements of cause and effect help us create better outcomes by educating on and avoiding various pitfalls. This is also supported by our comprehensive due diligence effort that entails vetting new managers and strategies, while systematically reviewing and monitoring existing holdings to ensure the reasons those investments were originally chosen is sustainable going forward.

 

INVESTMENT PLATFORM – FROM IDEAS THROUGH IMPLEMENTATION

The foundation of our investment platform is grounded in providing institutional caliber global investment guidance with choice and flexibility for our advisors so that they can offer client-centered solutions. Ideas start based on our deep experiences and our network of investment partners. These ideas have a variety of checks and balances, including internal and external thought leadership from seasoned experts and a focus on not just returns but risk management. Our investment committee sets our investment policy with forward-looking asset allocation and portfolio construction strategies implemented by a select roster of proven investment strategies.

We provide a variety of “guided portfolios” that entail different asset allocation mixes based on various risk/return parameters.

Investment Platform

 

OUR INVESTMENT COMMITTEE

The investment components and other investment considerations are governed by the TC Wealth Partners and Trust Company of Illinois Investment Committees. This committee meets frequently and is chaired by our Chief Investment Officer, Mr. J. Reed Murphy. Mr. Murphy has over two decades of experience building and managing investment platforms at some of the nation’s largest investment firms. The Investment Committee includes several internal and external investment professionals. We believe this collection of professionals and our access to several research and investment partners provides us with a sophisticated and global investment capability.

A team of seasoned professionals, the committee meets frequently to review its investment policy, which includes economic, asset allocation, and portfolio construction strategies. The investment committee makes changes based upon what is happening in the world and the markets, balancing the opportunities for returns as well as focusing on risk management. These decisions are disciplined.

The committee also oversees due diligence. We vet ideas and make decisions as a group whose collective input and wisdom is greater than a single advisor. Because we don't promote a product for our benefit, we objectively look at the best investment options for our clients. This diligence is also ongoing as we actively monitor our approved strategies.

 

INVESTMENT OFFERINGS & DUE DILIGENCE

Performance is a symptom of a firm’s philosophy, process and people working together. Investing without understanding these dynamics can result in undisciplined speculation. As such, TC Wealth Partners and Trust Company of Illinois employ a team of dedicated investment professionals conducting quantitative and qualitative research to ensure that investment vehicles utilized are understood and can serve their purpose in an overall portfolio. We have alliances with research partners to increase the depth and breadth of our coverage of investment opportunities available to clients.

In a global economy, a broad universe of investment options that optimize opportunities within risk and return tolerances is critical for achieving your goals. TC Wealth Partners provides guidance and implementable solutions across a broad variety of asset classes, strategies and investment vehicles.

Investments Offerings

The investment platform for our retirement plan clients varies based on the level of engagement. We operate as an ERISA Investment Manager for Defined Benefit Plans and Employer-Directed Profit Sharing Plans. In addition, for Participant-Directed Defined Contribution Plans we generally include three levels of investment offerings. We believe this level of choice and the depth of each offering provides the highest level of fiduciary protection and options for our clients’ employees.

Do-It-Yourself: Roster of Mutual Funds

  • An array of top-notch Mutual Funds managed by several mutual fund companies.
  • Appropriate for investors who feel comfortable designing their own portfolio. Trust Company selects and monitors funds to achieve a well-rounded, high quality line-up of fund choices.

Professionally Managed: Guided Portfolios

  • Four Risk-Based Asset Allocation Portfolios managed by Trust Company.
  • Appropriate for investors who understand the level of risk they seek but are not comfortable constructing a portfolio. Globally diversified asset allocation managed by Trust Company.

Professionally Managed: Target Date Funds

  • Twelve Age-Based Funds managed by a top-rated target date fund manager.
  • Appropriate for investors who are not sure how much risk to take. Participant selects a fund based on his or her age. Risk automatically decreases as participant nears retirement age.