Paul D. Sippil & Associates, LLC

About Us

Our philosophy is centered on the idea that very few investors are capable of consistently beating the market over time nor are they capable of maximizing their wealth even if they do consistently beat the market.  The idea of not being able to consistently beat the market is supported by the Efficient Market Hypothesis, which asserts that one cannot consistently achieve returns in excess of average market returns on a risk-adjusted basis, given the information publicly available at the time the investment is made.  While there are critics of this hypothesis who assert that investors can beat the market by exploiting its inefficiencies, the vast majority of investors lack the wherewithal to do so.  For example, while Bill Miller’s Legg Mason Value Fund beat the market every year for well over a decade, it followed with three years of such significant under-performance that it wiped out most of the previous gains.  Furthermore, there were more than thirty twelve-month periods during the streak in which the weighted average return of the S & P 500 was greater, but they weren’t calendar years, and the streak was based on the time period from January 1 to December 31.  While some investors may have had this fund in their portfolios, how could they have known to get in and out at the right time? 

As further evidence of the futility of trying to beat the market with actively managed funds, in two 30 year studies, the S & P 500 outperformed 97 and 94% of managers.  According to University of Michigan Economics and Finance professor Mark J. Perry, of the small percentage of managers who do outperform their respective index, only about 12% of the top managers repeat their performance in the following years illustrating that it is not possible to consistently pick next year's hot mutual fund manager.

An academic study entitled “False Discoveries in Mutual Fund Performance: Measuring Luck in Estimating Alphas” serves as another example.  In this study, researchers compiled a database of actively managed domestic equity mutual funds from the beginning of 1975 through 2006.  Their conclusion was the only 0.6% of active fund managers had genuine stock picking ability.

More importantly, even if investors are fortunate enough to beat the market in consecutive years, by attempting to manage their own portfolios, they will still most likely end up with less money than they would have had if they simply constructed a diversified and professional managed portfolio of index funds or institutionally priced funds with no revenue sharing because of their inability to effectively take into account the timing and volatility of their returns as well as their tax consequences, annual contributions and distributions.  To demonstrate the importance of timing, the CGM focus fund returned 18% per year over a 10 year period, beating its nearest rival by more than 3%. According to research by Morningstar, however, the typical investor lost 11% annually! In addition, two participants with the exact same average return could have very different wealth results depending on when the returns occur and the timing and nature of their cash flows. 

Furthermore, a participant could conceivably beat the market for 10 straight years (on a calendar year basis) but then under-perform in the 11th year and wind up with less money than the amount generated by a passive portfolio of index funds that simply mirrored the market. 

These examples illustrate that it is not time weighted returns (how well the fund has performed) that truly impact a participant's wealth, but dollar weighted returns which are determined by the client's tax situation and choices of when to make contributions and withdrawals as well as the returns.

While the emergence of target date and lifestyle funds which feature an asset mix determined by the level of risk and return that is appropriate for an individual investor have helped participants more effectively manage their own portfolios, many of these funds have additional hidden fees.  Furthermore, because these funds are already diversified, they are meant to be single choice, all or nothing options, but the majority of participants do not utilize these funds properly.  A 2004 Vanguard study, for example, indicated that participants who selected a lifestyle fund only allocated 37% of their assets to the fund. 

Consequently, our goal is not to help investors “beat the market” through superior security selection, but to custom design a portfolio based on investors’ goals, needs, and lifestyle changes that focuses on maximizing wealth rather than returns.

We offer our services on a fee-only basis and act as an ERISA section 3(21) fiduciary.  This arrangement eliminates conflicts of interest and aligns our interests with the plan participants.  To learn more about the benefits of using this type of service, The Value of an Independent Fiduciary is an excellent article published by two independent fiduciaries that illustrates the importance of appointing an unbiased third party with no vested interest in the plan.  However, it is also important to understand the different types of fiduciaries as the use of the term fiduciary by financial advisors can falsely lead a plan sponsor to believe that they are protected from liability when in reality the financial advisor's assumption of liability is significantly limited.

Our services include:
  1. Reviewing all relevant costs of retirement plans with plan sponsors and participants
  2. Ensuring these costs are reasonable compared to the level of services provided
  3. Assisting participants with evaluating how retirement assets integrate with other personal assets and financial goals and helping them develop a flexible investment strategy
  4. Reviewing the plan design to ensure it is customized to meet the needs of all participants
  5. Helping plan sponsors meet all fiduciary obligations
  6. Providing low cost, tax efficient, and diverse investment options

Founder Bio



Paul Sippil is a certified public accountant and registered investment advisor.  He graduated from the University of Illinois in Champaign with a degree in accountancy in May of 2000.  He began his career as an auditor in public accounting.  He became an independent financial advisor in October of 2003, initially focusing on providing comprehensive financial planning solutions for business owners in the estate, business, investment, and insurance planning areas.  In his meetings and conversations with clients and prospects, however, he began to notice a significant disconnect between the knowledge they possessed about their group retirement plans and the knowledge the service providers possessed.  Most of them believed that their plan was free and that everything was taken care of because it had been “reviewed by their advisors”.

He knew their assertion was made out of a lack of sufficient knowledge because he saw the difficulty in evaluating the quality and costs of these “bundled” plans, where all plan expenses were combined into a single source and not listed separately.  He observed that the vast majority of actively managed funds consistently lagged behind their respective indices, yet the vast majority of group retirement plan assets were still invested in these actively managed funds.  He concluded that the participants were not actually choosing this path for themselves, but instead were being falsely led down a path that only stood to profit the retirement plan providers due to their substantial economic interest they had in promoting actively managed funds.

Upon seeing the informational advantage that retirement plan providers enjoyed without the economic consequences of the free and competitive market to punish their behavior, Paul decided to provide a service to plan sponsors and participants that empowers them to make better retirement planning decisions.

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