Effective relationships between investors and advisors are built on trust. That trust is grounded in a commitment by the advisor to act solely in your best interests. But how can you be sure that the person you are entrusting not only embraces their commitment but is fully qualified to fulfill it? Background research and client references will reveal an advisor’s experience and reputation. But one way you can quickly find out is to ask if the advisor is an investment fiduciary who has earned the Accredited Investment Fiduciary® Designation from the Center for Fiduciary Studies™, the standards-setting body of FI360. At Direct Retirement Solutions, we are proud to report that all four of our investment advisors (Jeffrey Bennett, Thomas Santa Barbara, Alana Jennings, and Jeffrey Ricchiuti) currently hold the AIF® designation.
Who is a fiduciary?
A fiduciary is any investment professional or financial advisor who is required by law and practice to act solely in the interests of and with undivided loyalty to their clients. A fiduciary’s advice and recommendations must align with your specific objectives, timeframe, and risk tolerance. When managing your assets, a fiduciary must strive for an optimal balance of risk and return. That person must exercise care, skill, diligence, and objectivity in evaluating, recommending, and reviewing investment options. Any advisor you hire to manage your investments in a fiduciary capacity is professionally obligated to ensure that:
- Any advice or services he or she provides reflects your specific investment goals or expected returns, timeframe, and risk tolerance;
- Assets within your portfolio are appropriately diversified among a range of securities, mutual funds, or asset classes to mitigate risk and volatility;
- All investment activities, recommendations, and decisions are conducted in a thorough, objective, and prudent manner;
- Your assets are held in a secure account by a qualified custodian;
- You will receive statements listing updated values, transactions, and interest and dividend payments for all positions in your account; and
- Performance of your portfolio and its underlying investments will be monitored and reported on an ongoing basis, typically on a quarterly basis.
What makes an AIF® designee different from other advisors?
Only those advisors who have earned the AIF® Designation are formally recognized by the Center for Fiduciary Studies™ for demonstrating a full understanding of how to implement those processes to help individuals and families achieve their investment goals in a responsible and accountable manner. AIF® Designees are committed to using the knowledge and resources they have gained through their training to:
- Employ uniform, industry-recognized processes for developing a personalized investment strategy based solely on your specific investment needs;
- Apply objective, comprehensive standards for evaluating and recommending investment options for your portfolio;
- Monitor and report performance of your portfolio and its underlying investments on an ongoing basis, and recommending changes when necessary; and
- Conduct ongoing reviews of his or her business practices to ensure fiduciary principles are being properly applied.
Designees are also trained to evaluate the fiduciary practices of investment stewards such as 401(k) and defined benefit plan sponsors and those responsible for managing endowment and foundation assets.
To maintain the Designation, AIF® Designees must complete continuing education training to keep up to date with changes in the industry and the ongoing evolution of legal requirements under the fiduciary standard. They also must recognize and formally affirm the principles and obligations stated in the Designee Code of Ethics, which governs their professional and ethical conduct.