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Investment Advisors | Fiduciary Advisers

How can I assure investors of my firm’s excellent practices?

FiduciaryPath provides consulting and Certification Assessment of investment fiduciary practices for Investment Advisors, Investment Managers, and Investment Stewards of retirement plans, endowments and foundations.

Does the Advisor:

• Acknowledge fiduciary responsibility in writing?
• Have prudent investment processes in place – and use them?
• Use best in class Service Agreements?
• Make complete disclosures regarding potential conflicts of interest?

In general, can the Advisor demonstrate adherence to the highest standard of fiduciary care? CEFEX-certified
Advisors can.

Certification Assessment – When an Investment Advisor wants to publicly demonstrate adherence to the Global Fiduciary Standard of Excellence, FiduciaryPath offers Certification Assessment – independent analysis of an Investment Advisor’s conformance to all investment fiduciary practices and criteria.

Certification Assessment is a requirement for certification with the Centre for Fiduciary Excellence – CEFEX. Successful completion of the Certification process results in public certification of the firm. This recognition implies that a fiduciary can demonstrate adherence to the industry’s best practices, and is positioned to earn the public’s trust.

This public acknowledgement of the Investment Advisor’s faithfulness to the Global Standard of Fiduciary Excellence is especially meaningful to prospective and current institutional and individual clients.

Industry professionals who hold the Accredited Investment Fiduciary Analyst (AIFA) designation and have appropriate industry training and experience perform CEFEX assessments.

A successful certification process, as decided by the CEFEX Registration Committee, results in:

• A CEFEX certificate and Letter of Registration
• Registration in CEFEX’s public database, under Registered Firms
• Use of the CEFEX mark in both print and web form
• A News Release sent to the CEFEX distribution list. The release can be coordinated with the registered firm’s marketing activities.

Investment Advisors: Why Assess An RIA’s Investment Fiduciary Practices & Procedures?


Increased AUM

• Certification differentiates the firm
• Assures investors of the firm’s excellent practices
• Increases investor confidence

• Helps to establish evidence that the RIA is following a prudent investment process
• More effective client acquisition, retention and referral
• Institutional preference for CEFEX-certified providers

Reduced Expenses

• Significant discounts on fiduciary liability insurance
• Increased organizational efficiency often reduces operating expenses

Optimized Performance

• Fiduciary process improvement as a result of fiduciary assessment often means better investment performance through identification of, and conformance to, appropriate procedures.

Reduced Loss

• Helps uncover investment and/or procedural risks not previously identified
• Improved processes can mitigate losses both by reducing the likelihood of claims and by providing a strong basis for defense. A well-documented, prudent process is the best way to manage the risk of fiduciary liability

Fiduciary Advisers: Assessment and the Annual Audit


The Pension Protection Act of 2006, (PPA) which requires qualified pension plans to be managed to the exclusive benefit of the plan’s participants, brought into the lexicon two new terms: the “Fiduciary Adviser” and “eligible investment advice arrangement,” (EIAA).

The Fiduciary Adviser (correctly spelled with an “e”) is a person that renders investment advice for a fee or other compensation, direct or indirect, to IRA accounts or ERISA retirement plan participants, according to the PPA.

The Eligible Investment Advice Arrangement (EIAA), according to the Department of Labor, “is an arrangement that either provides that any fees (including any commission or other compensation) received by the fiduciary adviser for investment advice or with respect to the investment of plan assets do not vary depending on the basis of any investment option selected, or uses a computer model under an investment advice program that meets the requirements set forth in section 408(g)(3).”

The PPA requires an annual audit of the Fiduciary Adviser’s “eligible investment advice arrangement.”

FiduciaryPath offers CEFEX registration assessment for Fiduciary Advisers, which, since it includes an annual audit, is a demonstration of compliance with the requirements of the Pension Protection Act, specifically final rule §2550.408g-1, pertaining to the furnishing of investment advice to participants and beneficiaries, according to CEFEX. This registration includes the audit of any applicable eligible investment advice arrangements, which would be listed in the scope of the assessment, if applicable.