Who is an “Investment Fiduciary” Under The Law?
Who is an “Investment Fiduciary” Under The Law?
1.Asset allocation and liability studies
2.Writing and implementation of Investment policies that outlines the principles, practices and procedures of fiduciary responsibility of Plan Sponsors, Investment Managers and Financial Advisors
3.Performance monitory and reporting
4.Retirement plan enrollment meetings and employee educational seminars
5.Comprehensive financial planning for employees
6.Investment consulting due diligence and selection private market Money Managers
7.Economic and Market Research and Education
8.Independent fiduciary and ERISA investment management services
An Accredited Investment Fiduciary Analyst (AIFA®) practitioner provides the accurate assessment of an investment fiduciary organization to determine if their practice conforms to a Global Fiduciary Standard of Excellence; and whether the organization has satisfied the Forty Six Practices Practice requirements for receiving the Center for Fiduciary Excellence (CEFEX) Certification.
While all financial advisors have fiduciary responsibility, only those who have earned the AIFA®Designation are formally recognized by the Center for Fiduciary Studies for demonstrating a full understanding of how to implement the practices and processes to help clients with investment fiduciary & consulting needs, fulfill their fiduciary obligations.
Fiduciary Practices For Investment Stewards
Through Our Investment Advisory and Fiduciary Consulting Services, We Define, Outline and Implement the Prudent Practices for a Global Fiduciary Standard of Excellence
At Wealthcare Financial Group, Inc. we adhere to a Global Fiduciary Standard of Excellence for improving an Investment Steward’s decision-making process. The excellence is established by twenty-two Prudent Practices (“Practices”) which provide the framework of a disciplined investment process. The Practices are further supported by Criteria, which represent the details of the Global Fiduciary Standard of Excellence.
Our Four-Step Fiduciary Quality Management System
The steps are consistent with the global ISO 9000 Quality Management System standard, which emphasizes continual improvement to a decision-making process:
During the organize stage, the investment ﬁduciary identiﬁes laws, governing documents, and other sources of guidance for ﬁduciary conduct.
The implement stage is when investment and service provider due diligence is performed and decisions about investment safe harbors are made.
During the monitoring stage, the investment ﬁduciary engages in periodic reviews to ensure that the investment objectives and constraints are being met and that the Prudent Practices are consistently applied.
PERIODIC TABLE OF GLOBAL FIDUCIARY PRACTICES FOR INVESTMENT STEWARDS
FOUR ESSENTIAL COMPONENTS OF A STANDARD OF EXCELLENCE
Each Practice is backed by legal substantiation based on statutes, case law, regulations and regulatory guidance. The major statutes and supporting law that are covered by the substantiation include:
The Employee Retirement Income Security Act of 1974, a federal law that impacts fiduciary responsibilities related to qualified retirement plans. Requirements under ERISA for qualified retirement plans are administered by the Department of Labor’s Employee Benefits Security Administration, which issues regulations and regulatory guidance that further governs fiduciary obligations.
The Investment Advisers Act of 1940, a federal securities law that governs the regulation of investment advisers and their fiduciary responsibilities. The IAA is administered by the Securities and Exchange Commission (SEC), which issues regulations and regulatory guidance affecting investment advisers and their fiduciary responsibilities. State statutes similar to the IAA are typically administered by individual state securities commissioners.
The following three laws are uniform acts developed and proposed by the National Conference of Commissioners on Uniform State Laws (NCCUSL) for states to consider for adoption. To identify whether a state has adopted the model act, please visit NCCUSL’s website (uniformlaws.org).
If a particular state is not identified as having adopted the model act, then the Advisor should seek guidance from qualified legal counsel on the fiduciary standard of care that is applicable to that particular state, and whether any of the fiduciary practices covered in this handbook are not applicable.
Uniform Prudent Investor Act, a widelyadopted state law that covers fiduciary responsibilities related to private trusts. The UPIA was released in 1994 and subsequently endorsed by the American Bar Association and American Bankers Association. More than 40 states and the District of Columbia generally have adopted the model law, although differences may exist from state to state. The UPIA serves as a default standard for investment activities of private trusts.
Typically, the provisions of a private trust prevail. However, if a trust document is silent regarding a particular fiduciary duty, such as the duty to diversify, then — according to the terms of the Act — the provisions of the UPIA apply.
Uniform Prudent Management of Institutional Funds Act, a state law that impacts foundations, endowments, and government sponsored charitable organizations. UPMIFA was released in July 2006 and has been adopted by most states and the District of Columbia.
Uniform Management of Public Employee Retirement Systems Act, a model state law that impacts state, county, and municipal retirement plans. UMPERSA was released in 1997 and may apply to state, county, and municipal retirement plans. At the date of publication, Maryland and Wyoming are the only states that have formally adopted the act.
As Seen On