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Clearstead Hosts First ‘ClearPoint Roundtable’, Prominent Institutions, Investment Advisors Discuss Outsourced Chief Investment Officer (OCIO) Trend


Clearstead’s Institutional Consulting Group held the first of several ‘ClearPoint’ roundtable discussions this week, intended to ignite conversation around industry trends in institutional and private wealth management. The topic, titled “Discretionary Management: Finding an Appropriate Balance,” is part of the firm’s ongoing thought leadership regarding effective governance of boards of directors and investment committees. The roundtable’s conversation focused on the growing trend toward assigning advisors greater discretion in the management of endowment and foundation assets – commonly known as Outsourced Chief Investment Officer, or OCIO.

The discussion, moderated by Brad Whitehead, president of the Fund for Our Economic Future, included insights from trustees and members of investment committees, officers of foundations and educational institutions, and experts in regulatory oversight of investment assets.


The move to OCIO is spurred by a number of factors: to take advantage of market opportunities, to improve investment outcomes, and to create more transparency in oversight of assets. According to Pensions and Investments, total worldwide OCIO assets were estimated to be $1.7 trillion in 2017, of which $1.15 trillion were in the US. Clearstead CEO Dave Fulton opened the roundtable by explaining how the industry is defining this trend.

“OCIO is not a new or small trend, but surprisingly, it remains little understood among trustees as well as endowment and foundation professionals,” said Fulton. “Discretionary management, or OCIO, allows institutions to hire a third party to manage all or a portion of their assets — from investment policy and asset allocation to selection of investment vehicles and reporting. This approach contrasts with the traditional non-discretionary model, in which an investment committee or board of trustees must specifically approve a consultant’s investment recommendations.”

“However, describing this trend by a single acronym, such as OCIO, is an oversimplification,” said Fulton, whose firm recently augmented its OCIO service, called Clearstead Prism OCIO, to provide clients with greater customization.

“While discretionary assignments are a large and growing part of our institutional business, we encounter a wide range of working arrangements with our institutional clients – from almost non-discretionary, in which we are assigned small bits of authority, to fully discretionary, in which we make all investment decisions. Most, however, are what we call hybrid arrangements, which are tailored to the individual needs and objectives of our clients.”

“Whatever the approach, it is an undertaking that must be considered carefully in the context of the investment sophistication of an organization’s trustees and staff, organizational needs, and cultural priorities,” continued Fulton.

Lauren Rich Fine, partner at Gries Financial Partners and investment chair of several endowments and foundations, began the conversation by commenting on the difficulties of decision-making on boards, especially those with members who have a high degree of investment knowledge.

“Decisions can’t always be made quickly,” said Fine. “Board members are volunteers….decisions shouldn’t be dependent on who shows up or who does their homework.”

OCIO Roundtable Key Takeaways:
Investment Policy is the Roadmap; Transparency in Fees is a Must; Board Makeup Affects Discretion

Key takeaways included the need to carefully build the institution’s relationship with its advisor, first by negotiating a fully vetted investment policy statement as well as the importance of transparency in fees. After taking these steps, the selection of approach — discretion, non-discretion or a hybrid — guides decision-making.  

“If you have clarity as to what your goals and expectations are, such as the exact function of the investment committee, then it’s easy to hire a third party,”  said Chace Anderson, trustee of the Cleveland Museum of Natural History and Cleveland Institute of Music. “Boards inherently have biases, and in some sense you need a referee.”

Clearstead’s head of Institutional Consulting, Mike Shebak, communicated the group’s effectiveness in leading clients through the investment policy process. Following collaborative meetings that help consultants understand organizational priorities, Clearstead’s Prism OCIO service leads clients in a process to develop an initial investment policy draft that best articulates the aspirations of the client.  

But not all investment committees will choose discretion. The makeup of boards and level of engagement differs from institution to institution.

Mitchell Balk, president of Mt. Sinai Health Care Foundation, expressed his comfort with the non-discretionary model, which his organization has used successfully for years. “Our committee would like to be involved in all decision-making and assure that any advice we take is not cookie cutter. We’re a long-term investor. Nothing is going to happen between this quarterly board meeting and the next, and we believe our secret to success is that our committee is able to push back and challenge recommendations.”

And while John Meegan, who serves as an investment committee member for a nonprofit healthcare organization that follows the non-discretionary model, believes that his board is doing a good job making effective decisions, he believes that the risk management provided with the OCIO model could be worth the additional fees.

“We don’t have many investment professionals on our board,” said  Meegan, chief operating officer of Pittsburgh-based Hefren-Tillotson Meegan. “I believe that board members’ role is to ensure growth of the portfolio and risk management, and the discretionary approach provides defense in the portfolio. We may be willing to concede on upside to protect on downside.”

Fees for discretionary services tend to be higher than non-discretionary services as the advisor takes on a higher level of responsibility. But given the increased competition in the OCIO marketplace, many believe OCIO fees will decline. Still, ensuring transparency in fees was something repeatedly cited by panelists. “It’s critical that the OCIO clearly discloses and reports all fees and expenses on a routine basis,” said Shebak.

“Our foundation’s mission to empower teachers and support students is paramount, and we have far more requests for funding than we have to give,” said Anne Juster, chairman of Martha Holden Jennings Foundation. “As such, if we can save fees by choosing a non-discretionary solution, we will veer away from OCIO unless it’s proven to produce higher returns.”

Mannik Dhillon, president of Victory Shares and Solutions, remarked that fees are worth paying when the advisor is easing the burden on the investment committee and coming to the table with customized solutions, expertise, risk management, and governance.

“What can’t be missed is the trust and relationship-building that must ensue,” said Dhillon. “The key is finding a discretionary solution that is customized, not simply applicable to a single type of foundation.”

David Kuntz, chief financial officer of Cuyahoga Community College, noted that fees weren’t

the board’s ultimate decision point when choosing an advisor. “It was about experience, education, proven results, independence, no conflicts – local presence, willingness to have conversations about diversity and inclusiveness.”

Robert Rapp, a law professor at Case Western Reserve University who teaches on securities regulation, among other financial topics, closed the roundtable discussion with financial best practice theory.

“There’s an umbrella over all of this – and that’s an organization’s fiduciary responsibility,” said Rapp. “Ultimately, boards’ fiduciary responsibility is to make the most prudent investments, and boards are governed by law to incorporate modern portfolio theory in investment decision-making. The makeup of boards is not always attuned to making these decisions to ensure the total return objective is achieved. In this sense, shifting the risk to the intermediary is where OCIO sees validity.”

CRAINS CLEVELAND: Hartland rebrands as Clearstead Advisors




Firm expands its Outsourced Chief Investment Officer (OCIO) practice; increases industry thought leadership with first of several roundtable discussions to take place today


(CLEVELAND, OH)  Oct. 23 Hartland & Co., LLC, an institutional and private client  advisory firm headquartered in Cleveland, today announced a strategic rebranding to reflect significant growth in the firm’s capability and reach. Beginning today, Hartland will now be known as Clearstead Advisors, LLC, marking an important milestone in the firm’s 29-year history: Its emergence as a national leader in institutional and private client advisory services. The rebranding will kick off with the first of several planned ClearPoint Roundtables to take place today.


“The decision to rebrand resulted from the significant growth, both in reputation and scope, of our company since our inception nearly three decades years ago,” said Dave Fulton,  Clearstead’s CEO. “What began as a small, proprietor-owned enterprise has grown first into a multi-regional firm, and now stands as an emerging national leader in institutional and private client advisory services. As we advise on several billions in assets for our institutional clients, our wealthy families and entrepreneurs benefit from our institutional approach to investments which includes a robust in-house research team. Our new brand is a natural progression reflecting that growth and communicates who we are as a company.”


Since its inception, the firm has bolstered service offerings in specialized areas including its customized outsourced chief investment officer practice (OCIO) . It is also expanding communications regarding its comprehensive wealth management services to next-generation clients. At the heart of these efforts lies the firm’s dedicated in-house research team, which drives advice and decision making through a rigorous combination of both quantitative and qualitative analysis.


Founded in 1989 as an institutional advisory firm, the firm has grown both through organic and inorganic growth and now advises on approximately $20 billion in assets — overseeing institutional and private clients in 36 states. Over the past three years, the firm has expanded in employee count by 34 percent — with nearly 80 employees — while assets under management have doubled during the same time period. Recent acquisitions in Portland, Maine and Columbus, Ohio, have expanded the firm’s geographical reach. And a strategic investment from Rosemont Capital two years ago allowed the firm to grow its employee ownership from 13 to 28.


With a brand tagline of “Steadfast Clarity For Your Complex World,” the new name is a conjunction of two important attributes of the financial advisory firm — clarity and steadfastness.


“We are advocates for our clients, nurturing steadfast relationships that lead with clarity and a thorough understanding of their personal and institutional objectives. Our firm has not been sold or acquired. We remain an employee and board member-owned firm and will continue to offer objective, independent, thoroughly researched advice that has been our hallmark since our inception,” continued Fulton.


The rebranding effort includes a focus on Clearstead’s institutional advisory services, namely its outsourced chief investment officer service — now known as Clearstead Prism — which has been augmented to provide engaged, customized solutions for institutions.


“We began providing outsourced solutions in 2011, when at the time the idea wasn’t widely popularized, but something that we customized for our clients who needed more autonomy to manage day-to-day challenges,” said Mike Shebak, Clearstead’s Head of Institutional Consulting. “As the concept has gained industry traction, our approach stands apart in our deep collaboration with our clients to clearly define objectives, quantify risk, create benchmarks, and explain all results. We do not take a one-size-fits-all approach because we view ourselves as an extension of the institution’s own team.”


The firm today also launched the first of its ClearPoint Roundtables and panels on timely industry topics, beginning with OCIO. Today’s first roundtable, “Discretionary Management: Finding an Appropriate Balance,” features Brad Whitehead, President, Fund for Our Economic Future, as well as a panel of experts from organizations ranging from Case Western Reserve University School of Law to Mt. Sinai Health Care Foundation.


In addition, the firm will continue communicating industry trends to its clients through its monthly publication, ClearPoint (formerly Standpoint), as well as other publications, and will broaden its communications to social media.


Other rebranded service offerings include:


ClearSight Tax and Financial Planning: Using the firm’s signature approach incorporating all aspects of the client’s investments, taxes, and financial planning, this service offers thoughtful, insightful advice customized to the client’s individual needs and objectives.


Clearstead EmpowHER: Originally known as the HEELS initiative, this groundbreaking commitment to advancing the careers of women at the firm and within the investment industry has expanded to encompass inclusiveness in recruiting, hiring, and firm decision making.


Clearstead Responsible Investing: With a rising number of organizations and individuals seeking to align their investments with their core values, Clearstead offers a comprehensive, layered approach to Responsible Investing that brings our signature rigor and research to bear on a strategy that is mindful of each client’s unique needs and goals. Our objective is to help each client realize optimal financial returns with investments that align with their core values and mission, following a clearly defined roadmap that delivers results across multiple points of measure.


About Clearstead

Clearstead is an institutional and private client advisory firm that is focused on providing superior solutions so our clients can exceed their aspirations, and build stronger legacies for their families, their communities, and themselves. We accomplish this goal with our authentic, steadfast, innovative and independent firm employing nearly 80 professionals who work together to tackle the complex investment, financial, tax, and governance needs of our private and institutional clients.


We bring our clients objective financial leadership through our fee-only advisory model, which enables us to remain objective. We do not offer proprietary products and take no commissions from the investments we recommend: our only source of revenue is fees we receive for financial advice. True to our founding principles, we’re here to do the hard work: the day-to-day investment management integrated with organizational priorities and family aspirations.




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Find Your Clarity

We bring our clients objective financial leadership through our fee-only advisory model, which enables us to remain objective. We do not offer proprietary products and take no commissions from product sales: our only source of revenue is fees we receive for financial advice. True to our founding principles, we do the hard work: the day-to-day investment management integrated with organizational priorities and family aspirations.


Clearstead is an institutional and private client advisory firm that is relentless in providing solutions so our clients can exceed their aspirations and build stronger legacies for their families, their communities, and themselves.




1100 Superior Avenue East
Suite 700 | Cleveland, Ohio 44114