PlanPILOT Offering OCIO Search Services

If your company or non-profit is looking to outsource Chief Investment Officer services, you aren’t alone. Demand for Outsourced Chief Investment Officer (OCIO) services has skyrocketed, particularly among non-profits, driven largely by a strong desire by asset owners to increase returns. According to a 2016 Outsourced-Chief Investment Officer Survey, 41% of respondents currently outsource or plan to outsource in the next 12 months, and 70% of OCIOs granted full discretion over manager selection, compared to just 39% last year. PlanPILOT now offers OCIO search services to help you find the right provider.

The question is, why are OCIO services in greater demand than ever?

Why Outsource?

First, let’s review what exactly an OCIO can do for you. In the simplest terms, OCIO services include fiduciary solutions and discretionary management services. Through these services, a client works with a third-party provider to manage their investment portfolio and, hopefully, optimize performance and reduce your administrative burden.

There are many reasons why an organization may choose to outsource their investment offices and use OCIO services. For one, ever-evolving regulations and fiduciary responsibilities can tire an Investment Committee. To maximize their time, outsourcing can allow committees to focus on the bigger picture, such as strategic portfolio concerns, and leave the nitty gritty, day-to-day decision-making to an OCIO.

Another benefit of outsourcing is that an OCIO can provide ongoing oversight and identify investment risks and opportunities. Providing dedicated support, an outsourced team can support operations and be held accountable for the portfolio’s results.

And lastly, it can be difficult to build and retain a team with such specialized skills. Outsourcing offers greater stability in a more cost-effective manner.

Finding the Right OCIO For Your Needs

The breadth of OCIO services can vary greatly, from simplistic to more sophisticated investment structures and approaches, depending on the firm. This requires an organization to review closely the firms available to determine a good fit. However, there are a number of firms available.

According to Chief Investment Officer Magazine 2016 survey results, 53 firms participated in their annual survey, while Charles Skorina & Company reported 74 firms on their OCIO list. That’s potentially a minimum of 53 firms a thorough fiduciary might consider if they are looking for outsourced services. How can a fiduciary be certain they performed proper due diligence and hired the most appropriate solutions provider with so many varied choices and models?

For many organizations, it may not be possible to sift through each one and feel confident they’ve performed proper due diligence. This is where PlanPilot can help, as we are now providing OCIO search services. We assist endowments, foundations, and other pools of assets who are looking to outsource CIO services and require help finding an appropriate provider.

How We Help

We don’t offer OCIO services for very specific reasons. For one, we choose to focus on providing consulting services to retirement plans only. While some consulting firms act as a search consultant and an OCIO provider, we view this as a conflict of interest that can lead to biased results (or flawed results at best).

Instead, we have built a database of providers that we can review in an unbiased manner. As we don’t offer the services, we’re not a competitor and remain objective and neutral. Within this database, we’ve conducted extensive data gathering to help answer the questions most important to fiduciaries who are looking to utilize an outsourced investment solution. Some of the questions include:

• What percentage of revenues does OCIO services represent?
• Can they assist in the development of a spending policy?
• What’s their experience with similar size mandates?
• How quickly can they implement investment decisions?
• What’s the depth of their research?
• Do they have the scale to attract top managers?
• What levels of outsourcing do they offer, fully outsourced, general consulting and everything in between?
• What’s their service structure?

OCIO services are broadly defined as delegating fiduciary responsibility for key investment decisions to a third-party provider. A simple statement, though, carries differing definitions from both the providers who offer solutions and to the fiduciaries seeking those solutions. At PlanPilot, we can help you navigate this important fiduciary decision and ensure that you thoroughly evaluate your options, document the process, and select the provider that best meets your needs.

If you’re interested in learning more about our search services or understanding more about how an OCIO may benefit you, call us at (312) 973-4913 or email mark.olsen@planpilot.com. PlanPILOT can guide you through the time and effort-consuming process of selecting or evaluating an OCIO provider. We are fully committed to making the search for your OCIO provider easier and more efficient.

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