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Fiduciary Advisor Affirmation Program
What Is the Fiduciary Advisor Affirmation Program?
On September 19, 2016 the Institute announced its Best Practices Fiduciary Advisor Affirmation Program at a press briefing in New York. Read the press release here.
The Best Practices Fiduciary Advisor Program offers advisors a unique opportunity to say to investors and regulators how the firm commits to a high code of professional conduct. Best Practices professional code of conduct and compliance is more rigorous than other codes of conduct. Advisors and advisory firms who subscribe to the Best Practices will be put on a registry and that registry will be publicized to investors and media. The advisors who subscribe will lead a renaissance in fiduciary care.
What Do I Need to do to Participate in the Fiduciary Advisor Affirmation Program?
Here are the steps to be taken to become an Affirmed Advisor.
1. Put the Best Practices document on your firm’s website. You can view and download the Best Practices document here.
2. Put the language that informs investors the firm subscribes to Best Practices on the firm Form ADV Part II. View and download the language here.
3. Calculate the annual fee based on AUM. View the annual fee schedule below.
4. Remit the annual registration fee to the Institute for the Fiduciary Standard at P. O. Box 3201, McLean, Virginia 22103.
5. Email the Institute at email@example.com and provide the link to your ADV Part II and your website.
6. The Registry of Subscribing Firms will be available on this site in March 2017.
For further information, email the Institute at: firstname.lastname@example.org
Fee for Institute Best Practices Affirmation Program
Annual Per Firm*
Firm AUM 1 Annual Fee
Under 100 mm $250
100 – 249 mm $350
250 – 499 mm $650
500 – 999 mm $1,500
1 B – 2.49 B $2,500
2.5 – 4.9 B $3,500
5 – 9.9B $4,500
10 B plus $7,500
1. Regulatory assets under management as reported to the Securities & Exchange Commission.
*For firms that do not have AUM, the fee schedule is:
$ 175 for the first advisor
$100 for each additional advisor
Why Should I Participate?
1. ‘Best Practices’ are more rigorous and investors will see it. An advisor, for example, puts in writing that “she” acts as a fiduciary for all clients at all times, discloses fees and expenses concretely in $ or % of AUM, and sets out conflicts and explains in writing how they are mitigated.
2. The Best Practices compliance feature is more rigorous. The program requires that language expressing adherence to Best Practices be placed on the advisor’s ADV Part II, and the specific requirements of the Best Practices Code be placed on the advisor’s website. This is in a public statement to investors and regulators.
3. Best Practices are written in plain language investors can understand.
4. ‘Best Practices’ are based on advisor deeds. Deeds investors believe are important to credibility and trust. The Best Practices advisor, without uttering a word, “speaks” loudly in simple actions such as putting agreements and disclosures and services and fees and expenses in plain language and clear writing.
5. The Registry of Best Practices Fiduciary Advisors will be widely communicated. The Registry will be publicized to investors and media.
Endorsements from Industry Leaders
Putting our clients’ interests ahead of our own has always been the underlying focus of our firm, and I’m excited to play a part in advancing that inspiring mission by joining the Fiduciary Standard National Board of Advisors to help more advisors serve clients at the highest level. It’s our responsibility, as advisors, to answer the call for complete transparency, and the Institute for the Fiduciary Standard Best Practices Affirmation Program will play a fundamental role in that endeavor.” – Ron Carson, CEO and Founder of Carson Group.
Investors will respond well to a firm’s commitment to put the client’s interests first and to agree to “common sense” actions. Investors expect such actions to be the norm but, unfortunately, that isn’t always the case.” – Luis A. Aguilar, Securities & Exchange Commissioner, 2008 – 2015
Investors tend to view all financial advice providers the same, though that is of course not true since different advice providers are held to different standards of care. An investment adviser affirming its adherence to Best Practices can really differentiate its standard of care with investors. – Skip Schweiss,Managing Director of Advocacy, TD Ameritrade Institutional
This is an excellent first step in clarifying the expectations consumers should have in working with their financial professionals. It provides a helpful framework for accountability of the advisor and the way in which clients should examine their relationship with advisors. – Mark C. Tibergien, Chief Executive Officer & Managing Director, Pershing Advisor Solutions LLC, a BNY Mellon Company
We’ve reached a critical point where clients are looking for more clarity on what they should expect from their advisor. And if I were a client I would want my advisor adhering to the Best Practices. They don’t just raise the bar; they follow sound business logic. – Brian Hamburger, Founder and Managing Director of MarketCounsel, General Counsel, Institute Best Practices Board
I applaud The Institute for the Fiduciary Standard in its effort to help investors understand who’s on their side and who isn’t. Its affirmation should be the litmus test used by every investor. – Dan Solin, Author of the Smartest series of books
Congratulations on the launch of the Institute’s Best Practices Affirmation Program. – James W. Watkins, III, J.D., CFP®, AWMA®, InvestSense, LLC, Managing Member
Remarks of Knut A. Rostad
The Best Practices Fiduciary Advisor Program fills a gap in federal regulatory compliance and advisor group codes of conduct. This gap has left too many investors receiving questionable product recommendations under the guise of fiduciary advice.
Best Practices are crafted for 2016 where market forces and higher investor expectations require a higher standard. Best Practices Advisors subscribe to a high standard of “commonsense” deeds expressed in concise language and under the toughest compliance feature. These advisors will lead a renaissance in fiduciary care.
Best Practices Board of Directors
- Clark M. Blackman II, CFA, CFP, CPA/PFS
- Bryan D. Beatty, CFP, AIF
- Christopher Cannon, CFA
- William C. Prewitt, M.S., CFP
- Knut A. Rostad, MBA
- General Counsel to the Best Practices Board: Brian Hamburger