Giving Advisers a Path to Manage Retirement Assets

A Collective Investment Trust (CIT), also known as a Collective Investment Fund (CIF) or a Collective Trust Fund (CTF), is a bank maintained fund that is exempt from registration under the Investment Advisers Act of 1940.

No. CITs were first offered in 1927 and gained popularity in 1936 when Congress gave them tax exempt status. Until the 1980s they were the vehicle of choice for retirement plans due to their low costs. However, CITs were typically valued annually or semi-annually and with the emergence of daily valued 401k plans a daily valued vehicle was needed and mutual funds filled that role. CITs have begun to regain their popularity over the last several years as retirement plans are becoming more cost sensitive and because most CITs are now valued daily.

The NSCC is the National Securities Clearing Corporation and it is the non-profit exchange that processes virtually every mutual fund and collective trust trade. The NSCC processes over 4 quadrillion fund trades per year. By receiving an NSCC Cusip a Collective Investment Trust is available to trade with virtually any custodian in the United States.

CITs are low cost vehicles that give you access to $17 trillion in assets in the retirement marketplace. CITs are managed in omnibus so you can have thousands of retirement plans investing in your strategy and as the manager you only have to manage one account. On top of all that Alta Trust is one of a few companies in the country that dedicates itself to Collective Trusts. We have developed a cost effective way to establish and administer CITs that we feel every money manager in the country should at least think about.

No, Alta Trust provides a platform that makes it easy and painless to set up a Collective Investment Trust. We take care of all of the CIT establishment, ERISA compliance, IRS reporting and other compliance, so new Investment Managers can focus on their important roles of managing money and gathering assets.

It typically takes about two months to establish a CIT. During that time important documents will be created including a Declaration of Trust, Participation Agreement, Investor Disclosure and Investment Policy Statement. Alta Trust will work with the Investment Manager to set up a custody account, trading protocols, fund universe and marketing materials. Alta Trust will obtain a cusip for trading on the NSCC (National Securities Clearing Corporation).

CIT sponsors receive numerous benefits including marketing advantages for providing lower cost and higher fiduciary funds. Some advisers are able to aggregate asset classes of mutual funds and qualify for lower cost share classes. Other managers are able to greatly improve the operational efficiency in their office, reduce overhead and focus more on client retention. Advisers who have one or more model portfolios find that CITs provide a way to trade all of their strategies for all of their plans in a few accounts. Moreover, advisers who are looking to establish a proven track record now have a daily NAV that provides a foundation for their performance.