For Plan Sponsors and Investment Advisors

Frequently Asked Questions

1. Why Outputs vs Inputs?

Fees are an important input, but they are just that … an input. To put that in context, fees are often expressed in basis points. A basis point is 1/100th of a percentage point. Retirement outcomes are expressed in percentage points as are the Veriphy Ratios. Yes, there is a common theme in the media today that the lowest fee relates to the highest return. This assumes that the investment performance is exactly the same. It is unlikely that the investment returns between two management styles are going to be the same over the long term. In addition, looking only at investment performance and fees neglects the very important factor of risk. Which is better? A 20% increase in return performance vs. the benchmark with 10% less risk OR a 20% increase in return performance vs. the benchmark with 50% more risk? In general, the first answer is best when dealing with long term investing.

2. What is unique and important about ‘Veriphy Ratio’?

Objectively Measures the value added to the Plan. Elegant and Simple. Like a credit score for your Retirement Plan

3. Why should we ‘trust’ the Veriphy Ratio and Reports?

Developed by Investment Advisors and Fiduciary Experts with our 70 years of Retirement Plan experience.

4. How does it work to score and measure the value added to the Plan?

The Veriphy Ratio score includes both the risk the plan took and the return the plan received. Veriphy uses historical plan allocations to asset classes & previous fund changes to deliver the PlanView report

5. How do you measure risk?

Risk is measured as the standard deviation of returns over a specific time period.

6. How will you help compare my Plan to the Universe?

The 7 Year Veriphy Ratio of your Plan will be compared to the 7 Year Veriphy Ratios in the universe of plans in our database.

7. How do you determine your Benchmarks?

Extensive analysis to determine which benchmarks best represent an Asset Class of mutual funds in the Plan. In order to measure value against the Benchmark, the choice of benchmark must be as precise as possible.

8. Determining which Asset Classes have added value and which have not?

The composite returns (linked performance of all fund returns in an asset class over time) of an asset class being held by the plan are measured relative to their benchmark and then added to the Veriphy Ratio algorithm with includes the relative risk (standard deviation of monthly returns) for the asset class composite in the plan.

9. How have the fund changes impacted the Plan?

It is a question that goes through the mind of every investment committee member. We changed a fund last year … I wonder how our new fund is performing relative to the old fund? The Veriphy Report includes a chart that shows the performance of the old fund and the new fund for every fund change since the date of change. This give the committee the ability to answer the exact question. It is not typically answered because the DOL requires that performance reporting be done only on the current funds held in the plan. [add story about holding fund for 4 yrs and 11 months then change during last month …]

10. How do you factor in expenses?

All fund returns in our calculations are expressed net of investment expense.

11. Why is risk important?

Because there is a known correalation with expected return. The more risk you take the higher expected return; the less risk than the less return. Particularly important as you work to creat workforce financial security since higher volatility in plan will cause people leaving plans to be exposed potentially to losses.

12. What is the science behind Veriphy Ratio?

The Veriphy Ratio is built on a foundation of relative risk and relative return compared to a benchmark.

13. How can you measure value with plan participants are controlling choice?

Answer: While the participants control the choice of the allocation, it is the plan investment fiduciaries that choose the menu. Participants choose from that menu.

14. Can I compare my Plan’s Veriphy Ratio to that of my competitors?

Yes

15. Why is it important to have objective value measurement of the plan?

You have a fiduciary duty to assure that Plan fees are reasonable and necessary. And currently benchmarking fees does not determine reasonableness of fees. Price is what you pay; Value is what you receive.

16. How does Veriphy help us determine if our Consultant/Advisor is adding value to the Plan?

A prudent fiduciary knows that you should take the advice of an expert. Therefore, the impact of the advice should be measured from value-added. This is Veriphy.

17. As the HR/Benefit Director, how do Veriphy PlanView Reports help me in my presentation to the Retirement Plan Committee?

Saves you time in presenting Plan Report to your Committee. PlanView is simple, elegant and value report. Also, prepares you and committee to ask the right questions with your Advisor.

18. As a Consultant / Advisor, how does this help me show value to my clients?

Objectively as 3rd party Report, it shows the Value you have added over time to their Plan

19. As Consultant / Advisor, what if my Veriphy Ratio Score is not good?

Report provides the road map for recommending changes to improve the Plan’s performance for your Clients

20. What is the cost of this tool?

It is an Annual Subscription License fee of $5000 for PlanView Report (Click to see Sample Report) with online access and updated quarterly. Currently special Charter Rate of $3500 until October 31st.

21. How can I determine the ‘ROI’ for my Subscription?

Click here for ‘Cost/Benefit Analysis Calculator’ if Plan Sponsor and here if Investment Advisor/Consultant


BETTER DECISIONS. EXTRAORDINARY DUE DILIGENCE.

With Veriphy Analytics you can now evaluate plan value & fees with confidence

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