Creation of a Due Diligence Process
With the passage of each fiduciary regulation, there is a growing emphasis on the due diligence process itself. The need for our advisor partners to assist the plan fiduciaries with the creation of this framework is of paramount importance. Given, the number of moving parts and the complexity of each, the advisor's role is invaluable in helping the plan sponsor organize this process with a logical model. What level of granular components to include without becoming too restrictive or burdensome is a very interesting exercise.
APG's value add in this intense regulatory climate for our advisor partners is to help establish a scalable, repetitive and competitive process that will not only guide their clients but grow their business profitability. These elements must be carefully constructed to avoid any unintended consequences of fiduciary status. APG's fiduciary department will assist our advisor partners with identifying the building blocks that will demonstrate their elite services. This fundamental process estab- lishes due diligence activities on a regular schedule for all clients throughout the Plan Year.
The necessary components start with the assessment of whether a committee is warranted or even necessary. This formal or informal structure is further defined by the frequency of meetings, the creation of an Investment Policy Statement and Education Policy Statement, formulation of a service calendar to help the fiducia- ries visualize the process. All of these items create a buy in to the necessity of the process and the ability to track it. Please note, guidance with respect to the balance of specificity and potential fiduciary exposure is necessary, when crafting these documents. When all of these items are melded together, this creates a natural flow and process that is sustainable, fiduciarily prudent and efficient!