Comparing Investment Solutions

The institutional investment management industry has two primary service models: the traditional consultant model and the outsourced chief investment officer model. It can be important to understand what services each typically offers and what responsibilities the decision makers, such as board or investment committee members, retain in the relationship.

In the traditional consultant model (non-discretionary), an organization contracts with the consultant to provide services such as advising on the investment policy statement (IPS), consulting on asset allocation, recommending investment managers and monitoring performance. In this relationship the investment committee makes the final decisions after the consultant provides information and makes recommendations.

Engaging in an outsourced chief investment officer (OCIO) relationship (discretionary) entails outsourcing some or all investment management decisions to an OCIO provider. In an OCIO relationship, the investment committee provides governance and adopts an IPS for the portfolio. The OCIO must adhere to the IPS framework and guidelines when managing the portfolio. Typical responsibilities of the OCIO provider include portfolio rebalancing, tactical asset allocation decisions, manager selection and performance reporting.

Questions to consider

Define success. What responsibilities do you want to retain or outsource?*
Time is valuable. Where is the committee’s time most impactful for success? Do they have the resources and time to make the necessary investment decisions?
Setting the long-term strategy is critical to success. A transparent provider should be flexible and work with you and tailor to your needs. What steps would the committee want to be actively involved with during the investment process?

View accessible version of this chart.

*Flexibility to retain or outsource responsibilities may be subject to ERISA regulations.

**Example of an OCIO relationship, provider vs. committee decision can vary based on preferences and the allocation of responsibilities should be tailored to the committee’s preferred approach and have the ability to evolve as needed over time

Accessible Version of Charts

Responsibilities	Consulting Model	OCIO Model**
Fiduciary status	Asset owner and service provider	Asset owner and service provider
Governance	Asset owner	Asset owner
Investment policy	Asset owner	Asset owner
Asset allocation	Asset owner	Asset owner and service provider
Manager selection, monitoring & oversight	Asset owner	service provider
Implementation	Asset owner	service provider
Tactical asset allocation	Asset owner	service provider
Rebalancing and cash management	Asset owner	service provider

Schedule an appointment

SCHEDULE NOW

Find a branch near you

FIND NOW

Important Legal Disclosures and Information

These materials are furnished for the use of PNC and its clients and do not constitute the provision of investment, legal, or tax advice to any person. They are not prepared with respect to the specific investment objectives, financial situation, or particular needs of any person. Use of these materials is dependent upon the judgment and analysis applied by duly authorized investment personnel who consider a client’s individual account circumstances. Persons reading these materials should consult with their PNC account representative regarding the appropriateness of investing in any securities or adopting any investment strategies discussed or recommended herein and should understand that statements regarding future prospects may not be realized. The information contained herein was obtained from sources deemed reliable. Such information is not guaranteed as to its accuracy, timeliness, or completeness by PNC. The information contained and the opinions expressed herein are subject to change without notice. Past performance is no guarantee of future results.

Neither the information presented nor any opinion expressed herein constitutes an offer to buy or sell, nor a recommendation to buy or sell, any security or financial instrument. Accounts managed by PNC and its affiliates may take positions from time to time in securities recommended and followed by PNC affiliates. Securities are not bank deposits, nor are they backed or guaranteed by PNC or any of its affiliates, and are not issued by, insured by, guaranteed by, or obligations of the FDIC or the Federal Reserve Board. Securities involve investment risks, including possible loss of principal.

The PNC Financial Services Group, Inc. (“PNC”) uses the marketing name PNC Institutional Asset Management® for the various discretionary and non-discretionary institutional investment, trustee, custody, consulting, and related services provided by PNC Bank, National Association (“PNC Bank”), which is a Member FDIC, and investment management activities conducted by PNC Capital Advisors, LLC, an SEC-registered investment adviser and wholly-owned subsidiary of PNC Bank. PNC does not provide legal, tax, or accounting advice unless, with respect to tax advice, PNC Bank has entered into a written tax services agreement. PNC Bank is not registered as a municipal advisor under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

“PNC Institutional Asset Management” is a registered mark of The PNC Financial Services Group, Inc.

Investments: Not FDIC Insured. No Bank Guarantee. May Lose Value.

PNC General Disclosure https://www.pnc.com/en/corporate-and-institutional/pnc-general-disclosure.html