ARMOND

A client can benefit from a diverse team of advisors because each member of that team has a different perspective. They all did not grow up in the same neighborhood or either attend the same colleges and universities. So they look at the world differently, as well as the portfolios they construct. So having that truly benefits the client, particularly when you're identifying asset allocations and managers, and in determining what's the appropriate solution for that client.

ELIZABETH

In terms of finding and retaining diverse managers in your portfolio, there are really two ways to go about it. One is a top-down perspective, where you set out a goal in your investment policy statement of wanting X percent in diverse or minority-owned managers. And then you go out and you seek managers to fill those mandates and target that percentage.

ELIZABETH

The other way, which we actually think is more organic, is by being very intentional in your managers' screening process and looking for highly talented managers, managers who can add value over multiple market cycles and identify them and bring them into the portfolio, from a purely organic sense, to add to portfolio returns.

ELIZABETH

When we think about diverse teams of advisors, we really want to think about the composition of our client boards and investment committees. And by having a wealth of resources and background on our teams, we were able to establish meaningful dialogue with investment committee members, investment committee leadership, as well as identify opportunities for the portfolio. If we all look the same, if we all have the same background, we simply wouldn't be able to appreciate the experience of our committee members, the impacts that could have on their decision process, or in fact, their ability to amplify their mission in their respective communities.

ARMOND

A diverse team of advisors bring together a different perspective. The way they view portfolio construction will help achieve sources of returns that may not always be available if you're all driving in the same lane, looking at the world in the same way.

ELIZABETH

A particular client we have wanted us to seek out a diverse manager in a number of different asset classes, particularly equities. We were able to do a survey of management firms in whose strategies we had a great deal of confidence, and we identified one manager in a non-liquid asset class who had been very, very successful in terms of their portfolio returns. They had been so successful, in fact, that the strategy was now closed because they had reached an optimum funding level and no longer had capacity to add additional clients to that strategy.

ELIZABETH

At the same time, the same manager had a different, but related, strategy in another part of the market that was newer and was not at capacity, but did not have the long-term track record that's ordinarily necessary to be implemented in an institutional portfolio. Through our familiarity with the firm and our familiarity with the investment team, we were able to take this manager, establish confidence in this newer strategy that did not have as long of a track record and did not have as large of a pool of assets under management, and bring them into the client portfolio where they've performed very successfully for several years since that decision.

ARMOND

One of the tips we share with clients when considering diverse managers is really, take a step back and consider the manager universe holistically. Take into consideration those managers that may not be well known, as well as those managers that are highly regarded in the industry, and really identify managers that you think that are best suited for your portfolio.

ELIZABETH

The number one goal is to improve portfolio returns. We think the cognitive diversity that a more diverse asset manager strategy lineup can bring, will augment returns over time and reduce risk, because it improves the diversification of thought process in the portfolio and can lessen exposure to market trends where herding effects from non-diverse managers can crowd into particular investments and have a negative impact on portfolio returns. So addressing these misperceptions, educating clients about the opportunities in diverse managers, and then intentionally seeking out these talented managers who add value to portfolios, those are all part of just making the client investment experience better, as well as improving the asset flows to these diverse-owned management firms.