Getting back to basics by ProQuest


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									        Business & Marketing | Pursuing Excellence

                                     Getting back to basics
                                     The famous coach Vince Lombardi             Billions of dollars in nonprofit   deciding how the funds are to
                                     once pulled his professional players     funds are the responsibility of      be managed. With or without
                                     aside and said, “This is a football.”    board members who often have         investment experience, they are
     SMARTMONEY                      In a similar light, I thought it might   no professional background in        the people who review the pro-
     By William C. Fisher            be helpful to share some basic           investment management. They do,      posals prepared by investment
     President                       insights on choosing an invest-          however, represent the residents,    advisors. The final selection rests
     Investment Advisory Group LLC   ment adviser.                            employees and bondholders in         with their collective judgment.
                                                                                                                       Nonprofit senior living orga-
                                                                                                                   nizations usually issue a “request
                                                                                                                   for proposal” every three or four
                                                                                                                   years to manage investments. The
                                                                                                                   field of responses is narrowed to
                                                                                                                   two or three advisers, who then
                                                                                                                   present their capabilities to the
                                                                                                                   finance committee. The final cut
                                                                                                                   is subjective.
                                                                                                                       Rarely is the adviser chosen
                                                                                                                   based on fees or investment perfor-
                                                                                                                   mance, as these factors are usually
                                                                                                                   very competitive to market bench-
                                                                                                                   marks. Decision-making is usually
                                                                                                                   collegial, with the winning advisor
                                                                                                                   appealing to a broad cross-section
                                                                                                                   of the finance committee.
                                                                                                                       The fi nance committee often
                                                                                                                   includes a local banker, attorney, a
                                                                                                                   person with financial background
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