Strategic Overhaul of Defined Contribution Portfolio

Challenge:

Blue Prairie Group was retained by a large, Chicago-based, public consulting firm to provide ongoing strategic investment consulting services for their retirement portfolio.   This firm had never before used an outside investment consultant and their decision to hire BPG was made after conducting a comprehensive, due diligent consultant search.

Results:

1. Created a current fund mapping grid to illustrate duplicate funds per asset classes, and “missing” asset classes.
2. Performed in-depth analysis of all funds held in the plan in order to determine which funds should be retained in each asset class. BPG determined that certain asset classes be removed from the plan since they did not improve the diversification of participants’ portfolios and recommended the addition of funds that provided inflation protection.
3. Worked with the record-keeper to determine the lowest cost share class that the plan was eligible for based on the recordkeeper’s minimum required revenue.  
4. Implemented low cost, passively managed target-date solution.
5. Reduced the asset -weighted cost of the plan from .81% to .30% or 63 percent.

 Background:

A Chicago-based Client retained BPG in 2010, after determining their need for an independent consultant to assist them in formally reviewing their current investment portfolio. BPG made several recommendations to overhaul the current investment lineup including eliminating redundancies and creating broader asset class exposure, as well as reducing the overall cost of the portfolio through the use of passively managed investment vehicles.