Discretionary Management

Trustees have two major options for the management of assets. Trustees can chose to make all the investment decisions themselves, with or without the help of a consultant. Alternately, trustees can properly delegate that decision-making to a third party. NWCM can fill either role (consultant or discretionary manager) on behalf of the client.

With discretionary management, trustees need only review the decisions made by NWCM-with the benefit of 20/20 hindsight-rather than make investment decisions themselves.

In a consulting capacity, NWCM can make recommendations about a course of action and provide due diligence data on recommended investment alternatives, but the trustee is ultimately the decision maker. However, in our capacity as a discretionary manager, NWCM would make these decisions without prior approval of the trustees but within the constraints of authority delineated in a Statement of Investment Policy. With such delegation of investment authority, trustees benefit with a significant reduction of liability either by statute (ERISA 405(d)(1) and ERISA 404(c)), or by common law (largely based on case law arising from the Third Restatement of Trusts).