To: Mayor Jen Wolosin, members of the Menlo Park City Council, Brittany Mello, Adrian Patino, Rani Singh, Marvin Davis and the members of the Finance and Audit Committee,
Annual Review of:
Menlo Park Investment Policy # CC-22-020
Adopted June 28, 2022
Resolution No. 6749
As the Chairman of the Investment Policy Review sub-committee, I have been asked to submit a review of the existing Investment Policy.
The following are my recommendations:
My review is based on the experience I have had with my own Investment Advisors.
I will only comments on the sections that are subject to a recommended change.
Delegation of Authority
Change:
The city SHOULD engage the support services of outside investment advisors.
Explanation:
I recommend that the city ask for "bid submissions" from “Outside Investor Advisors”. Outsourced Advisors provide the benefit of experienced research teams and continuity of service.
I have included (below) the ”PDF” contact information for the Wells Fargo Outsourced Investment advisors.
It would be best to ask for other Outsourced Advisors and select at least two (2) and divide our portfolio between the Outsourced Advisors, in order to compare performances and also to reduce the risk of possible poor performance.
Investment Diversification
Change:
Type of security: Common Stock, Managed Equity
Maximum percentage of total portfolio: (no more than 10%)
Explanation:
On the advice of outsourced Investment advisors, and within the California legal parameters, a reasonable amount of our portfolio should include managed equity positions, in order to partake in what has been historically a good long term return on investment.
Selection of Broker/Dealers
Change:
The city SHOULD engage the services of Investment Advisory firms
Explanation:
I recommend that the city ask for "bid submissions" from “Outside Investor Advisors”. Outsourced Advisors provide the benefit of experienced research teams and continuity of service.
I have included (below) the ”PDF” contact information for the Wells Fargo Outsourced Investment advisors.
It would be best to ask for other Outsourced Advisors and select at least two (2) and divide our portfolio between the Outsourced Advisors, in order to compare performances and also to reduce the risk of possible poor performance.
Competitive Transactions
Change:
This section appears to be cumbersome and could be deleted if Outsourced Investment Advisors are in place.
Explanation: Our "In House” Investment advisor need not be “contacting at least three (3) broker/dealers” for “each investment transaction”. if we outsource our Investment Advisory Services, this task would be unnecessary.
Selection of Banks and Savings Banks
Changes”
Cash deposits should be allocated between Various Banks, or Accounts, so that our deposits are within the FDIC insurance limits
Explanation:
Considering the risk associated with the Silicon Bank failure and First Republic Bank problems, our cash needs to be within bank loss guaranteed protection limits.
Thank you,
Michael C. DeMoss, Attorney
Finance and Audit committee member
Chairman of the Investment Policy Review sub-committee
The following is contact information and background information on Wells Fargo Investment Oficers:
Robert Farrington, CFA, CAIA
Olu Rosanwo, CFA, CAIA
To learn more about how our Outsourced Chief Investment Officer capabilities can help your organization, please contact your advisor or:
Rob Farrington, CFA®, CAIAHead of Institutional OCIOEmail: robert.farrington@wellsfargo.com
Shaun Kruse, CFP®, CAIANational Director of Development | Institutional OCIOEmail: shaun.kruse@wellsfargo.com
Full disclosure: My personal Investment advisors for over 25 years are my brother Charles DeMoss, Attorney, Vice President Investment officer, Wells Fargo Advisors; and my nephew, John DeMoss, Senior Vice President, Investment Officer, Wells Fargo Advisors.
I have no financial interest in the decisions regarding Outsourcing our Investment decisions.
The following are the PDF documents that describe the services that are available from Wells Fargo Advisors:
