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navigate investment planning with ease

Managing an association's financial assets in today's topsy-turvy market is about as easy as dog-paddling in a riptide. That's why Legg Mason Wood Walker, Inc. ("Legg Mason"), in consultation with the American Society of Association Executives (ASAE), has created the Association Investment Program (AIP), a unique service designed to help manage association reserves, foundations, scholarship funds, deferred compensation, endowments, and retirement funds.

A three-step approach

Since opening its doors in 1899, Legg Mason has grown into one of the strongest regional securities firms in the country, offering financial services such as securities brokerage, asset management, and investment banking through its wholly owned subsidiaries. "Legg Mason Wood Walker, Inc., has made a strong commitment to ASAE to support associations in managing the investment process," says Jim Brinkley, president.

Legg Mason addresses the unique investment needs of nonprofit organizations through a disciplined, three-step approach to investing and by focusing on long-term relationships, advocating a consultative, rather than a transaction-oriented approach.

"AIP consultants are trained to assist executives in managing the investment process for their associations," says Michael Graham, vice president and director of Legg Mason's ASAE AIP "We understand the unique needs of nonprofit organizations."

Step one: writing the policy

Developing an investment policy is the first step in the Association Investment Program, and it's provided free of charge.

The foundation of an effective investment program, Graham explains, is a customized, written investment policy "This promotes continuity of a sound investment strategy and demonstrates that you, as a fiduciary, have made an effort to choose suitable investment vehicles. A well-documented, written investment policy can also assist you in meeting your fiduciary obligations."

Your association simply completes a questionnaire; the results are then used as the basis for Legg Mason's draft investment policy Afterwards, Legg Mason will

* work with you to decide the asset classes appropriate for your portfolio,

* provide an asset allocation study unique to your organization's needs, and

* help you determine the appropriate risk/return level for your association.

Step two: implementing the policy

Once a written policy is in place, your Legg Mason AIP consultant prepares a proposal detailing the approach he or she recommends to effectively implement your association's investment policy Depending on your association's objectives and investment time horizon, the consultant may recommend one or more of the following.

Individual managed portfolios. Using the services of Legg Mason's Investment Consulting Group, your AIP consultant will conduct a search for independent registered investment advisors, by asset class, to manage your portfolio.

Mutual funds. Selecting from more than 7,800 no-load or load-waived mutual funds, Legg Mason identifies appropriate funds to implement your written investment policy

Step three: evaluating performance

To keep you involved in the investment process, the program provides performance evaluations of your association's individual manager(s) or mutual funds. This helps you stay abreast of issues, such as

* the actual performance of your portfolio versus relative benchmarks and your financial objectives.

* the risk level of your portfolio.

* whether investment guidelines are being followed. These guidelines, which provide the framework within which investments are made, may pertain to proxy voting, liquidity needs, trading and executive guidelines, or socially responsible investing.

* whether your portfolio is consistent with the current objectives of your organization.


ASAE and a subsidiary of ASAE have entered into an arrangement with Legg Mason Wood Walker, Inc. ("Legg Mason"), under which Legg Mason will offer investment products and financial services to ASAE members. Neither ASAE nor any of its subsidiaries is registered as a broker-dealer or investment advisor, and neither of these entities may engage in the offer or sale of investment products or services. Accordingly investment products and services under the ASAE Association Investment Program will be offered and sold solely by Legg Mason, and participants in the program will be clients of Legg Mason and not ASAE. All inquiries regarding such products and services should be directed to Legg Mason's representative:

Rob Kirkconnell
COPYRIGHT 1999 American Society of Association Executives
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1999, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:Association Management
Geographic Code:1USA
Date:Dec 1, 1999
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