Why We Serve to Lead

The Royal Military Academy at Sandhurst’s motto is “Serve to Lead”, and the final quote in its cadet lessons Plans by Field Marshal Sir William Slim Courage in 1957 states:

“Unselfishness, as far as you are concerned means simply this – you will put first the honour and interests of your country and your regiment; next you will put the safety, wellbeing and comfort of your men; and last – and last all the time – you will put your own interest, your own safety, your own comfort.”

Experiential Wealth, Inc. believes that “Serve to Lead” defines the essence of a fiduciary and how we practice every day. We lead our clients through unselfishly serving them so that our clients have a higher probability of reaching the desired and necessary outcome for the working men and women of America.

Experiential Wealth, Inc. embraces the fiduciary culture and understands the delicate nature of trust and the fiduciary relationship. As a fiduciary to our investment clients, we avoid conflicts so that divided loyalty is never an issue.

To serve as an investment fiduciary, it is not enough just to serve in the best interest of our clients and to demonstrate good faith. The element of due care is also owed. This duty requires us to perform in a like-kind manner of a similarly situated prudent expert. We must take reasonable steps on a best effort basis to research, analyze, enquire, and verify our investment due diligence process and to challenge our own thinking and conventional wisdom. Our clients leave their properties in our care, and in turn, we must deliver the highest standard of practice and diligence so that their best interests are served.

Experiential Wealth, Inc., serves in a fiduciary capacity for its clients. In addition, under the dictates of ERISA, we serve in the following fiduciary capacities:

1. Limited-Scope 3(21)(A)(ii)

We render investment advice as a co-fiduciary to the plan sponsor on a plan-level. Such advice is acted upon at the discretion of the Plan Sponsor Administrator.

2. Discretionary 3(38)

We are appointed with full power to manage, acquire, or dispose of any asset of a plan, thereby relieving the plan sponsor from their fiduciary liability for the investment decisions.

Each step in our five-step process is executed by continuing to verify and challenge our own thinking to ensure that our clients’ best interests are being served.

Quantitative Selection

• Screen investment product universe of passive and active investments based on the Investment Policy Statement.
• Define group of “best in class” investment choices within each investment asset and sub-asset class for further scrutiny and evaluation.
• Conduct proprietary regression analysis using Modern Portfolio Theory statistics for each active investment.

Qualitative Selection

• Conduct due diligence by consulting with portfolio managers to provide a complete picture of their:
  • Investment team’s tenure
  • Investment process
  • Unique value proposition
  • Risk management techniques
• Examine the investment company’s corporate structure, their sustainability and their compensation structure to help us understand their motivation and whether they have our clients’ best interests at its core.
• Review independent third party investment analysis.

Recommendation

• Present recommendations to Plan Sponsor clients to assist them in meeting their duty to prudently select plan investments in accordance with the stringent selection criteria under their investment policy statement.

Implementation

• Design a plan with costs that are reasonable for the expected outcome and one that allows participants to save and plan for their own retirement.
• Strike a balance between a Plan that performs well for the participants and one that is run efficiently and cost effectively for the Plan Sponsor.
• Identify new technologies or procedures to ensure a Plan’s costs remain at appropriate levels.
• Support ongoing commitment to ensure clients maintain the most prudent solutions.

Asset Allocator

We are portfolio asset allocators.  From an ex pose (backward looking) view, we rely on investment history and statistics to gain a perspective and understanding on what an efficient portfolio would look like.  From an ex ante (forward looking) view, we examine and analyze the current global macro and geopolitical factors to generate our “base case” and our investment conviction about the future.  We develop broad themes for the short and intermediate term that drive our tactical allocation decisions.  Further, we establish our forward looking capital market assumptions to make heuristic–based asset allocation (rather than purely backward looking efficient portfolio) decisions.

We also recognize that selecting passive or active managers to express our portfolio allocation decision is important.  As such, bottom up research and analysis of active or beta expressions is undertaken along with controlling fees and expenses for the portfolio.

Review

• Conduct individual investment analysis on an ongoing basis to monitor the performance and behavior of each investment based on the strict criteria stated in the investment policy statement.
• Conduct qualitative reviews are conducted on an ongoing basis to assist Plan Sponsor clients in meeting their duty to prudently monitor plan investments.