Foundation Consultation

April 9, 2021

Foundation chooses new consultant for investment funds

By: Connor Murphy

Presenting the CEFEX certificate
The Rev. Mark Becker (right), president of the Florida United Methodist Foundation, accepts the Investment Steward certificate from Carlos Panksep, managing director of the Centre for Fiduciary Excellence, Oct. 10, 2019, at the National Association of United Methodist Foundations annual meeting. (FUMF photo/Tita Parham)

The Florida United Methodist Foundation has switched to CAPTRUST Financial Advisors to assist in managing its investment funds, effective April 1.

DiMeo Schneider and Associates Inc., a Chicago-based investment company, had been advising on the funds since 2014.

The change was made to help Florida Conference churches and affiliated agencies that invest in the funds achieve both short- and long-term financial goals.

“The investment committee felt that CAPTRUST was the best choice to go with from here on out,” said the Rev. Mark Becker, the foundation’s president. “We believe we can achieve higher investment returns than we have been earning during the past six years.”

CAPTRUST has $409 billion in assets under advisement, including more than $9.4 billion in assets with its nonprofit clients.

Fulfilling fiduciary responsibility

As a fiduciary certified by the Center for Fiduciary Excellence (CEFEX), the foundation underwent an extensive assessment in 2019 to ensure client interests come first and that it stays abreast of industry best practices. The foundation’s Investment Steward certification is maintained with yearly reviews by CEFEX.

One responsibility that comes with the certification is routinely exploring options for investment consultants to ensure the best service is delivered at the best rate.

“CEFEX certification recommends a request for information every five years or so just to make sure you are paying what everyone else is paying and that you’re getting the best service you can for the money you spend,” Becker said.

It’s a philosophy that’s built into the foundation’s investment policies.

“It’s typical that you have a policy like that for investments for your auditor, for any of your outside advisors, for your legal firm,” said Phyllis Klock, chairperson of the foundation’s investment committee and a board member. “That’s just good governance.”

Part of that good governance is meeting quarterly to evaluate fund performance. At one of its meetings in 2019, the investment committee decided it was time to explore bringing on a new investment consultant.

The list of firms that submitted information was narrowed by requesting proposals, checking references and questioning each of the bidders. Any conflicts of interest among board members and staff were also disclosed, following CEFEX guidelines.

“We had all of that done before we even started listening to their presentations,” Klock said.

Several firms were given the opportunity to present more detailed information to foundation staff and the investment committee. PJ Gardner, co-founder of AGW Capital Advisors and a former foundation board member, and Ken Mathis, chief operating officer at Hardy Reed and a CEFEX analyst, also attended the presentations to offer their expertise.

CAPTRUST was chosen for its stability, history and client retention. With 35 years of experience in the industry and offices nationwide, the investment committee felt CAPTRUST had the resources and expertise to provide sound strategies. And with an office in Tampa, financial advisors are nearby and easily accessible.

CAPTRUST also works with a variety of social service and religious nonprofits, including the Florida Conference of The United Methodist Church, the Central Florida Foundation and the Florida Sheriffs Youth Ranches.

More than returns

As of Dec. 31, the balance of assets in the foundation’s investment funds was more than $100 million, and churches and agencies had earned more than $2.35 million from their investments.

But it’s about more than numbers, Klock says.

“The foundation does an awful lot of things an investment advisor doesn’t do,” she said. “The services the foundation provides to churches, to pastors … is invaluable.”

By pooling resources, the foundation enables churches and agencies to buy into investment products they might not have access to on their own. This is because some products have investment minimums.

“It’s been a rigorous process. It’s been a challenging process. It’s been one where foremost in our minds has been our fiduciary responsibility.” — Phyllis Klock, FUMF investment committee chairperson and board member

And regardless of the amount of money invested, clients benefit from the variety of options the funds provide. Assets are invested in publicly traded securities and investment grade bonds, enabling the foundation to maintain a diversified portfolio that includes securities traded on all major exchanges.

“Some (churches) are very, very significant players,” Klock said. “Some are not. But they’re all equally important, and our responsibility to all of them is the same.”

The majority of assets in the funds are also administered according to investment guidelines established by the investment committee and Social Principles of The United Methodist Church. They follow the denomination’s guidelines on environmental, social and governance investing.

Klock says the process of choosing a new investment consultant was lengthy, but worth it.

“The committee and foundation staff truly have sought to make the very best-informed decision on behalf of those clients,” Klock said. “And it’s been a rigorous process. It’s been a challenging process. It’s been one where foremost in our minds has been our fiduciary responsibility.”

The next phase of the transition to CAPTRUST will be adjusting the funds to meet a variety of investment needs. More information about the funds will be provided in May. Investors are not required to make any changes at this time.

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