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).