The Value of an AIFA®

Investment stewards are responsible for overseeing investments within employer retirement plans, trusts, endowments and foundations. They are constantly exposed to practical and legal scrutiny. It is likely that complaints and/or lawsuits alleging investment mismanagement will continue to increase. Many occurrences can be avoided by having clear knowledge of who constitutes a fiduciary and what is required of one.

Many investment stewards believe that they are meeting their fiduciary requirements by implementing investment recommendations made by outside investment advisors. However, not all advisors are bound by the fundamental requirement of the fiduciary standard which is to act solely in the best interests of and with undivided loyalty to the plan or fund and its beneficiaries. Even if an advisor can meet this threshold, is he/she providing consultation in an independent capacity separate from the plan’s or fund’s investments?

An AIFA Designee can help mitigate this risk and potential legal liability. While any advisor can attempt to assist investment stewards with their responsibilities, an AIFA designee is formally trained by fi360 and its’ Center for Fiduciary Studies. fi360 is a leading provider of services that helps institutional clients gather, grow and protect assets through better investment and business decision-making. The AIFA Designee is recognized by the Center for demonstrating a full understanding of how to implement those processes to help institutional clients fulfill their fiduciary obligations.

  • Evaluate your organization’s current fiduciary practices and recommend actions that address risk areas and help ensure compliance with applicable state and federal law
  • Create and maintain a comprehensive investment policy statement that documents all of the processes and procedures that will be used to manage the plan
  • Apply objective standards for evaluating and recommending appropriate investment options for the plan
  • Monitor and report performance of the plan’s underlying investments on an ongoing basis and recommending changes when necessary
  • Serve as a resource for education and assistance to help you understand and fulfill your fiduciary obligations with greater confidence

AIFA Designees are the few people in the country with knowledge in both a prudent investment process and assessment principles. An AIFA can not only provide all of the above functions relating to fiduciary standards of care, but can also conduct assessments (informal or comprehensive) to gauge the strength and deficiencies in critical areas of an investment steward’s responsibilities, such as:

  • Selection of service providers
  • Investment committee roles and responsibilities
  • Governance processes
  • Investment evaluation and selection processes
  • Investment fees and service costs
  • Performance review protocols
  • Documentation of investment processes
  • Risk management processes
  • Compliance with regulatory requirements
  • Conflict of interest policies

An AIFA Designee can recommend actions for redressing risk areas. Also, an AIFA Designee can use the comprehensive assessment process to prepare an organization for a CEFEX (Centre for Fiduciary Excellence) Certification.