PRACTICES
- If you have questions or comments about the Practices, please let us know.
- » Order the handbooks and other fiduciary publications.
- LEARN MORE ABOUT THE PRACTICES
» Investment Stewards and Investment Advisors
» Investment Managers
The vast majority of the world's 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 Practices are a guide for investment fiduciaries to follow to demonstrate prudence in managing investment decisions. By following a structured process based on the Practices, the fiduciary can be confident that critical components of an investment strategy are being properly implemented.
The term, "fiduciary," can be divided further into three groups:
- Investment Steward — A person who has the legal responsibility for managing investment decisions(trustees and investment committee members).
- Investment Advisor — A professional who is responsible for managing comprehensive and continuous investment decisions (including wealth managers, financial advisors, trust officers, financial consultants, investment consultants, financial planners, and fiduciary advisers).
- Investment Manager — A professional who has discretion to select specific securities for separate accounts, mutual funds, commingled trusts, and unit trusts.
The Practices for each of these groups have been highlighted in the Prudent Practices for Investment Fiduciaries handbook series. In addition to listing and explaining each of the practices, the handbooks provide one or more Criteria associated with each Practice. The Practices represent the minimum process prescribed by law; the Criteria represent the details of the Global Standard of Excellence.
The Practices for Investment Stewards and Investment Advisors are a mirror images of each other, since the primary role of the Advisor is to assist with the management of the Steward's fiduciary roles and responsibilities.
Investment Managers, on the other hand, have a unique role and additional Practices for Investment Managers have been defined for evaluating whether an Investment Manager is worthy of a fiduciary mandate.
The total identified Practices, detailing a prudent process for Investment Stewards, Investment Advisors, and Investment Managers are listed in “The Periodic Table of Global Fiduciary Practices,” copied below, and are available in more detail in the foldout in the back of each handbook or as a PDF.
