About fi360
In an over-hyped and confusing marketplace, investors often have few clues as to which advisors, companies or institutions utilise best practice in their management of client funds.
fi360 is the identity brand for the Foundation for Fiduciary Studies, located at the University of Pittsburgh, USA, the leading global authority in the definition and substantiation of investment fiduciary practices applicable to investment advisors, trustees, and investment committee members.
The vast majority of liquid investable wealth is in the hands of investment fiduciaries, and the success or failure of investment fiduciaries can have a material impact on the fiscal health of any country. As critical as their role is, more has to be done to define the details of a fiduciary's prudent investment process.
The term “fiduciary,” can be divided further into three groups:
| Investment Steward | A person who has the legal responsibility for managing investment decisions (including trustees and investment committee members). |
| Investment Advisor | A professional who is responsible for managing comprehensive and continuous investment decisions. |
| Investment Manager | A professional who has discretion to select specific securities for mutual funds or unit trusts. |
Process
Investment fiduciaries have the most important, yet most misunderstood, role in the investment process to manage the investment process, without which the other components of any investment strategy cannot be defined, implemented, or evaluated. The fiduciary is responsible for managing the overall investment strategy; deciding on the asset allocation, defining the details of the strategy, implementing the strategy with appropriate Investment Managers, and monitoring the strategy on an ongoing basis.
The key benefits of applying the Fiduciary Practices defined by the Foundation's Handbooks include:
- Avoiding omissions through practical checklists
- Providing evidence that the Steward is following a prudent investment process
- An excellent educational outline of duties and responsibilities
- Potentially increase long term performance
- Help uncover investment or procedural risks
- Encourage Stewards and Advisors to compare their practices and procedures with peers
- Assist establish benchmarks to measure progress
Excellence
Fiduciary excellence is established by reference to the various handbooks produced by the Foundation that are intended to provide the framework of a disciplined investment process
The practices are organised under a four step quality fiduciary management system. The steps are consistent with the global ISO 9000 quality management system standard, which emphasises continual improvement to a decision making process.
- Step 1: Organise
- Step 2: Formalise
- Step 3: Implement
- Step 4: Monitor
The Law
The Practices represent the minimum process prescribed by law.
The Criteria (within each practice) detail a Global Standard of Excellence.
Substantiation for the Practices illustrates the extent to which legislation or case law reflects the principles outlined by the Practices
Training by fi360 Australasia Ltd is provided under licence to the Center for Fiduciary Studies, which is associated with the University of Pittsburgh USA. It provides a comprehensive overview of fiduciary standards of care, with the New Zealand course offered in association with Massey University.
The Accredited Investment fiduciary (AIF®) qualification course attracts attendees from a broad range of professional backgrounds including investment committee members, financial advisors, accountants, lawyers, trustees and private investors.
Practical implementation may initially appear daunting to some. fi360 supports fiduciaries with implementation specifically including:
- Guidance on improving governance practices
- Assessment and analysis of current investments and portfolio enhancement
- Due diligence support in selecting service providers
- Development of investment policy documentation
- Ongoing monitoring support
Symbolised by the lighthouse, fi360 seeks to illuminate all areas of potential risk within an entity and provides a methodology for a full 360 degree review of the investor/provider relationship.
Investor benefits flow from the fiduciary practices being completely implemented. Those who offer genuine value now have the opportunity to receive a certification from the independent, recognised verification process via CEFEX (Center for Fiduciary Excellence).
Investors, beneficiaries and charitable donors can be assured that those who have voluntarily undertaken to implement these standards with the support of fi360 will be a cut above others in the investment community.
For all questions regarding fiduciary standards and methods of assessment,
Download an overview of fi360 (Australasia) Limited here.
Link to the international site of fi360.