Broker Check

Applying our experience to select the right fund lineup 

Our investment lineups are designed to provide exposure to a full breadth of investment choices. The lineup seeks to provide enough options to create a well-diversified portfolio for each profile of participant in the plan. Townsend Financial believes it is important to provide options for participants to diversify across asset classes, investment categories, and style. 

At Townsend Financial, menu design is only the first step in building a well-diversified portfolio. Just as important is selecting the right investment fund options to fill those asset categories. Our knowledgeable investment team has years of experience in evaluating mutual funds, understanding the nuances of different styles, and comparing managerial track records. The factors that Townsend Financial uses to screen mutual funds are:

  • Net Expense Ratio
  • Management Tenure
  • Alpha
  • Sortino Ratio
  • Batting Average
  • Style Consistency
  • Return Consistency
  • Process Pillar
  • Parent Pillar
  • Concentration

3 (21) Fiduciary Service

Townsend Financial offers investment advice to Plan Sponsors as defined under Section 3(21) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Townsend Financial completes a workforce profile for the company and then provides a list of recommended funds to include in the plan lineup. The provided list is designed to cover the major asset classes and sub asset classes to allow participants to put together a well-diversified portfolio. Additional investments are included in the selected list to provide a single fund which offers a diversified portfolio. The sponsor is responsible for reviewing the suggested investment lineup and making any changes necessary prior to implementing the choice. Townsend Financial monitors the approved investments and will make a recommendation if an individual fund should be placed on a watch list or removed from the fund lineup. The Plan Sponsor makes the final decision on whether to include or remove a particular fund from the fund lineup.

3 (38) Fiduciary Service

For Plan Sponsors who would like to transfer their fiduciary liability for the investment selection and monitoring within their 401(k) plan, Townsend Financial offers discretionary investment advice as defined under Section 3(38) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Plan Sponsor retains the liability of monitoring the designated 3(38) Advisor but is not responsible for monitoring the individual investment choices chosen by the advisor or the implementation of changes within the plan. Townsend Financial will complete the Workforce Profile, from which an investment lineup will be put together. The Plan Sponsor is responsible for letting Townsend Financial know of any changes to the Workforce Profile. As a 3(38) Advisor, Townsend Financial will implement the fund lineup, allowing the participants to choose their own individual investments. Townsend Financial will monitor the investments within the plan and will implement any changes.

Ensuring that your plan and investments remains on track 

Ongoing Monitoring

Townsend Financial, in an ongoing process, will monitor and evaluate the investment options based on the same process used in the review and selection stage.

The monitoring process focuses on the following issues:

  • Regulatory issues
  • Organizational developments
  • Management team updates
  • Style and process consistency
  • Portfolio characteristics
  • Risk-adjusted performance
  • Asset growth