Request for Proposals (RFP) for Investment/ Trust Firm

 

  • Your Company/Name invite proposals that help their trusts meet the following objectives:

    List Objectives here, for example:

    Achieve better than market rate returns with investments that safeguard and grow trust assets, increase impact/ ESG/ SRI exposure, build and maintain beneficiary confidence, take into consideration tax implications and other possible negative factors in investing, while providing a ___% yearly income.

    Provide online, real-time investment reporting.

    Reasonable and competitive fees/costs for investment management services.

    Engage firm willing to meet in-person for meetings and presentations at least 3-4 times per year.

    Obtain the services of a reputable, trustworthy firm with a positive track record of performance, exceptional stability and solid customer service.

    Receive assistance and professional recommendations in the development of a new Investment Policy for each trust, based on client values and needs, as well as periodic/regular review and revisions as deemed necessary.

    Benefit from the firm’s demonstrated understanding of trusts and portfolio management to meet the short term and long term goals and benchmarks of the Investment Policy Statements for each trust and beneficiary.

    Transparent, conflict free architecture in investments, fees and advisory.

    Collaborative & communicative relationship with trustee.

    RFP DUE DATE & DELIVERY

    Please provide electronic copies to______________ via _____________

    Please deliver by ___________

  • List the point of contact information regarding this RFP, including name, email, phone number and address.

    List proposed client manager & key personnel information along with their CV or bio.

    How long has your firm, in its current form, been in existence? Provide the location of its headquarters and all offices that would be part of our service team.

    Describe your firm’s general ownership structure if it is not a public company. If you are part of a large firm and operate as an independent advisor team, please provide ownership structure of the group. In addition, describe any plans of which you are aware to change your organization structure or ownership over the next 18 months.

    Does your firm offer trustee services? If so, how long has it offered such services and within which state(s) are they based?

    Within the last five years, has your organization or an officer or principal been involved in any business litigation or other legal proceedings? If so, please provide a brief explanation and indicate the status or disposition.

    Has your firm or any of your employees ever been fined, suspended or censored by the Securities and Exchange Commission or by any securities self-regulatory organization? Please explain.

    Summarize your turnover of key professional personnel during the past three years.

    Describe your processes in place to ensure that any changes in staff occur with a minimum of disruption to the services provided.

    What is the total number of client managers across your company? Your division?

    What is the total number of clients across your company? Your division?

    What is your client acquisition plan? Is there a finite number of clients planned?

    What reasons would you NOT take on a potential client?

  • Provide the number and average portfolio size and range (smallest to largest) for clients for whom your firm currently provides investment consulting services.

    Summarize the client turnover in your firm over the last three years.

    Please provide a list of up to five (5) clients for whom you have performed similar work as described in this proposal. We will only check references for finalists.

    Does your firm actively support family office clients through the offer of unique events, educational offerings through the year, webinars, etc.? Please describe.

    Provide information as to how your firm avoids conflict of interest situations.

    In the last five (5) years, how many individual family clients have been added?

    How many have been lost?

  • Describe the services provided by your firm, including specialized services for next gen, education, family offices, trusts, etc.

    Describe your capabilities and experience in the area of alternative investments, including hedge funds, private equity, and real estate.

    Describe your firm’s experience managing trusts & their portfolios.

    What services does your firm provide directly versus contracting with others?

    Do you provide preferred lending/ preferred mortgage rates/ private banking?

    Briefly describe your private banking products & services, if applicable.

    Are sidecar investments allowed?

    Does your firm provide tax advice related to investments?

    Explain the team’s expertise in investment tax awareness.

    How do you measure the success of your service team in meeting or exceeding a client’s needs and expectations?

    Describe new client on-boarding process.

  • Describe who will make portfolio decisions for the entities. Is it the lead advisor, portfolio manager or an investment committee?

    Describe your firm’s investment philosophy including risk control process to ensure appropriate levels of risk are being assumed.

    Does your firm lean heavily on strategic or tactical asset allocation for major asset classes throughout market cycles? Does your approach differ for sub asset classes?

    Describe the role of the major asset classes below in your portfolio design: equities, fixed income, real assets (REIT’s, MLP’s, Commodities), alternative strategies

    Please describe the use of cash in your portfolio strategy. Is cash used solely as a liquidity reserve or do you actively switch to cash in adverse market conditions?

    Describe the due diligence process for evaluating direct investments/ private equity?

    Describe your firm’s experience with impact / ESG/ SRI investing.

    Who is the point person for this area? Describe their expertise.

    How long has your firm had a directed approach for this area of investing?

    How do you work with clients who want to factor SRI investing into their investment policy and asset allocation?

    What core areas of impact are your focus?

    Please discuss your firm’s experience with alternative investments and define what you consider to be alternative investments.

    Does your firm have its own proprietary investment products?

    Are there particular areas you prefer to invest or where you/ your team has a special expertise?

    What types of investments do you avoid?

    What is your firm’s approach to benchmarking against other portfolios of similar size and/or objectives?

    Describe your process for creating or amending an IPS for each trust.

    Describe your firm’s methodology for determining strategic asset allocation to accomplish the IPS objectives. What sets your asset allocation approach apart from most investment advisors

    Please provide a sample portfolio that provides a minimum __% ROI net of fees with a strong allocation to ____, aiming for tax efficiency and allowing for ___% yearly drawdown for distribution.

  • How many people at your company conduct investment manager research?

    How many external managers do you utilize?

    How many managers do you track in your database?

    How many external managers did you interview prior to your current managers?

    What is the due diligence process for evaluating managers?

    Describe criteria for terminating a manager.

    How many managers have been dropped in the past 3 years?

    How do you evaluate a manager’s understanding of ESG integration into their investment process?

    Do you source direct investments/private equity? If so, how?

    Provide an example of your worst private equity deal.

    Provide an example of your worst decision in a manager.

  • Who/ what technology produces your reporting? Is it outsourced or in-house?

    What technology do you use for forms needing signatures? Is it all in the cloud/ electronic?

    Can investment performance evaluation reports

    Be produced real-time? Periodically?

    Be customized?

    Be prepared for non-experienced family members/ laymen?

    Can all reports & account information be shared electronically and/ or viewed online by beneficiaries?

    Can your reporting incorporate non-custodied investments and illiquid assets?

    How many business days after the end of the reporting period are performance reports available?

    Is the overall portfolio performance calculated net of fees?

    Please provide a sample client performance reporting package that includes your reporting of returns, volatility and risk adjusted metrics.

  • How is performance calculated?

    Describe how benchmarks are chosen or developed, and how performance is compared to similar portfolios. Include ESG/ SRI/ Impact where metrics may be more challenging.

    How do you hold yourself accountable for poor performance as an advisor?

    How often does your firm recommend rebalancing of accounts be undertaken?

    Can you do partial rebalancing as funds are added or taken out of the assets you are managing?

    How often does your firm recommend performing an asset allocation study?

  • Describe in detail your fee structure and services. Include a breakdown of all fees and all forms of compensation paid between and to all firms you will be using (i.e. transaction fees, license fees, management fees, distribution [12b1] fees, and any other fees and expenses charged by various funds, investment managers, or investment firms that you employ).

    Do you have a minimum fee?

    Do you receive fees, commissions or other compensation from managers or funds on your platform? If so, do they offset client fees? Please identify these.

    Do you or a related company receive any payments from money managers you recommend, consider for recommendation, or have on your platform?

    Describe any other compensation your firm may receive as a result of our business relationship, including incentive, trailer or contingent payments from third parties.

    Provide information as to how your firm avoids conflict of interest situations.

    State whether your fees include out-of-state visits with the client, trust committee meetings, and other meetings as needed. Indicate the maximum number of meetings included.

    Are you willing to meet with us quarterly? Semi-annually? Annually?

    There are illiquid assets which will not be under management until liquidated. Are such assets subject to any fees prior to liquidity? Can such illiquid assets be included in reporting?

    Please include a detailed fee structure and sample investment management/ custodial/ record keeping agreement. Provide a breakdown of total fees for managing a ___ portfolio.

  • Describe the levels of coverage for fiduciary and professional liability insurance, errors and omissions insurance, and insurance for SEC-required (17g-1) fidelity bonds your firm carries. List the insurance carriers supplying coverage and their AM Best rating.

    Is the coverage on a per client basis, or is the dollar figure applied to the firm as a whole?

    Is your firm a registered investment advisor with the SEC under the Investment Advisers Act of 1940? Provide a copy of your ADV form, parts 1 and 2.

    Is your firm registered with the SEC or a state securities regulator as an investment advisor? If so, have you provided all the disclosures required under those laws? Are you properly licensed and credentialed to provide the services as described in this RFP?

    Please provide recent company financial statements/ proof of financial stability.

  • What do you consider your company’s greatest attribute? Biggest negative?

    If you have a separate division within a larger company, what distinguishes your group from the others that exist within your company? What key differences and unique “value-added” selling points that set you apart from your competition?

    Why should we choose you & your firm?

    Describe how you envision working with us while protecting the integrity of the benefits of the trusts.

    As it pertains to trustee services, does your firm have in-house legal for drafting LLC agreements and managing other services.

  • Sample reporting package

    Sample portfolio

    Company financial statements

    ADV form, part 1 & 2, as applicable

    Sample relationship agreement

    Detailed fee structure based upon AUM & liquidity

    CVs for management team