Here’s an uncomfortable truth: at some point, your investment portfolio will take a hit because a company you’re invested in messed up - through fraud or mismanagement. It’s not a matter of if. It’s a matter of when. This is true if your portfolio is invested in public equities, fixed income, or even entirely in mutual funds.
When acting as fiduciaries, the boards or management of institutional investors have a duty to monitor their investment portfolios, protect and maximize their assets, and not leave money on the table that’s rightfully yours to claim.
So how do you actually do that? How do you make sure you’re looking out for the people counting on you, without needing a law degree or unlimited time on your hands?
The good news is you don’t need to be an expert. You just need a few solid habits. Small, consistent actions add up over time - like interest compounding in a savings account. You might not notice the difference day to day, but look back in five or ten years and the payoff (or the cost of skipping these steps) becomes obvious.
Here are five habits that make the biggest difference.
1. Write Down Your Game Plan
Before anything else, decide ahead of time how your organization will handle losses when they happen - because they will happen. Put it in writing. This “playbook” doesn’t need to be complicated, but it should spell out who’s responsible for what and what steps to take.
You don’t have to start from scratch, either. Plenty of similar organizations already have their securities litigation policies posted online, and industry groups are happy to share sample templates. There’s no shame in borrowing a good idea.
2. Bring In the Right Help
You wouldn’t ask your dentist to fix your car, and you shouldn’t rely on just anyone to help protect your investments. There are firms that specialize in exactly this kind of work - watching your portfolio, flagging losses caused by fraud or mismanagement, and helping you file claims to recover money.
The best part? Most of these firms don’t charge you upfront. When you’re choosing one, take the time to compare a few options. Ask each firm how they work, what tools they use, and how they’ll keep you informed. A little homework here goes a long way.
3. Don’t Put All Your Eggs in One Basket
Don’t rely on just one firm for advice. Getting input from a few different sources gives you a fuller picture and keeps everyone honest - nobody wants to lose your business to a competitor by giving you weak advice. It also means that if you do decide to pursue legal action, firms have to compete for your work, which usually means a better deal for you.
And no matter how many advisors you bring in, the final call is always yours. Good advisors will give you options and information - but the decision to act (or not) should always sit with your organization, not with outside counsel.
4. Stay in the Loop
Ask whoever is monitoring your portfolio to send you regular, easy-to-understand updates: What losses have occurred? Why? What can be done about it? You shouldn’t need a translator to understand the report.
It’s also worth checking that your custodian can easily retrieve your buying and selling history whenever it’s needed. This matters more than you might think - some settlements take years to resolve, so you’ll need accurate records long after the fact to prove you’re eligible for a payout.
5. Actually File the Paperwork
Here’s the part people miss the most: even when your organization is entitled to settlement money, you have to actively claim it - and every year, a huge amount of that money goes unclaimed simply because nobody filed the right form in time.
Assign someone - whether that’s a staff member or your custodial bank - to keep track of every settlement that might apply to you, even ones you weren’t directly part of. That way, nothing slips through the cracks, and you have time to weigh your options and hit the deadlines. These claims usually require solid documentation and strict timing, so it pays to have someone dedicated to staying on top of it.
None of these five habits are complicated on their own. But together, they add up to a portfolio that’s genuinely looked after - one where losses get caught, money gets recovered, and nothing valuable slips through the cracks.