Understanding TPC’s Fiduciary Investment Strategies

by Andrew Sivertsen, CFP® CeFT®

At The Planning Center (TPC) our investment strategy primarily uses mutual funds and ETFs to build a portfolio for our clients. Both mutual funds and ETFs are basically a wrapper for investing in a lot of underlying investments like stocks, bonds, and other financial instruments all at the same time. Our team primarily uses two investment fund companies called Dimensional Fund Advisors (DFA) and Vanguard. These two companies manage the investment funds that TPC uses to fulfill a set purpose in the portfolio.

Investing Based on Academic Research

The Planning Center was founded in 1998 and very early on built an investment philosophy grounded in academic research from well known economists. Eugene Fama and Ken French were professors out of the University of Chicago who identified three factors that describe stock returns and created the Fama-French three-factor model that later expanded to the five-factor model. Eugene Fama won the Nobel prize in 2013 for his work. The founders of DFA studied at the University of Chicago and in 1981 created a company that was on the cutting edge of implementing this research into actual investment strategies. To this day DFA is still one of the industry leaders in implementing academic research.

Low-Cost Investment Strategies  

Another investment principle at TPC is to invest in low-cost investment strategies that focus on reducing unnecessary expenses that don’t add long term value. Vanguard was founded in the mid-1970s by John Bogle who is credited with the first index fund. Vanguard has become the largest mutual fund company in the country and an established name for low-cost diversification.

TPC Investment Committee Solidifies our Fiduciary Commitment

TPC has an investment committee that meets monthly and reviews these two companies as well as staying appraised of other investment companies and research rooted in sound academic principles. These two companies have been chosen to fill certain roles in the portfolio because their strategies line up with our investment philosophy and both companies have a long-term track record of success with implementing these investment strategies.

TPC has no financial incentive to utilize these two investment companies. As a fiduciary to our clients, we work in our client’s best interest and will continue on-going due diligence on these companies to fulfil that commitment. Please contact your TPC Planner if you have further questions.

Andrew Sivertsen, CFP®, is a Sr. Financial Planner in the Quad Cities office of The Planning Center, a fee-only financial planning and wealth management firm. Email him at: andrew@theplanningcenter.com.