The team is small, tenured and responsive, delivering high-touch, relationship-driven client service. Behind it stands the strength of State Street Global Advisors.
Beyond expertise and reputational excellence, we offer something truly unique: senior access balanced with the breadth of the State Street organization. Here, we will review the three areas where our Independent Fiduciary Services team operates and highlight to plan sponsors and the consultants who serve them what this expertise means in today’s marketplace.
Company stock as an investment option in a DC plan lineup can offer meaningful advantages to participants, including a deeper sense of corporate commitment; but it can also pose a unique set of risks to both sponsors and savers. In volatile market cycles, issues surrounding company stock funds can become more complicated. Regardless of the market, recent corporate actions like a merger or spin-off activity, or a change in plan design, may lead some sponsors to consider eliminating or sunsetting company stock funds. For sponsors and investment committee members to remain clear-sighted, an independent fiduciary can help light the way. An independent fiduciary’s primary role is to act solely on behalf of plan participants in determining whether it’s prudent under the Employee Retirement Income Security Act (ERISA) to allow investments in company stock.
The engagement of an outside fiduciary can be spurred by a change in management (often instigated by someone with prior positive independent fiduciary experience), an internal risk management concern or outside counsel advice. Plan sponsors require comprehensive and continuous oversight, a need that can be met by using a third party to do the work. State Street’s average client tenure is almost 15 years, which is an endorsement for a business unit that has been operating for 25 years and retains its original team members.
A key aspect of the independent fiduciary’s role is not to act rashly. Denise Sisk, head of State Street’s Independent Fiduciary Services team, says she and her team “spend as much time explaining to prospective clients what we won’t do as what we do.” Prudence remains the primary objective, even in a volatile marketplace. The thorough oversight process developed and implemented over the Independent Fiduciary Services team’s 30-year history allows State Street to filter out the noise that can come with volatility and continue its consistent approach. An independent fiduciary does not have access to insider information, so in addition to maintaining a steady strategy, it acts solely on public information. This independence may help in the event of litigation and is often one of the reasons why companies decide to hire an independent fiduciary.
Beyond its portfolio management expertise, including investment oversight and trading supported by State Street’s Global Equity Beta Solutions (GEBS) infrastructure, the team can deliver on the participant experience, particularly when it comes to communicating company stock sunsets. In conjunction with State Street’s Participant Engagement discipline, Sisk and her team have developed company stock communications and a toolkit that plan sponsor clients can use as a framework for when and how to communicate a sunset event and what information participants need over time.
Working across the State Street organization is part of the team’s value-add to clients, but now the consultant segment is beginning to gain from the synergy, with Sisk calling consultant searches a “relatively new phenomenon” — one that helps to extend the team’s reach and highlight State Street’s holistic retirement offerings.