Fiduciary Duties

The following summary provides a brief description of prudent investment practices:

  • Investments are managed in accordance with applicable laws, trust documents, and written investment policy statements.

  • Fiduciaries are aware of their duties and responsibilities.

  • Fiduciaries and parties in interest are not involved in self dealing.

  • Service agreements and contracts are in writing and do not contain provisions that conflict with fiduciary standards of care.

  • There is documentation to show timing and distribution of cash flows and the payment of liabilities.

  • Assets are within the jurisdiction of U.S. courts and are protected from theft and embezzlement.

Analyze Current Position

Diversify and Allocate Portfolio

  • A risk level has been identified.

  • An expected, modeled return to meet investment objectives has been identified.

  • An investment time horizon has been identified.

  • Selected asset classes are consistent with the identified risk, return, and time horizon.

  • The number of asset classes is consistent with the portfolio size.

Formalize Investment Policy

  • There is detail to implement a specific investment strategy.

  • The Investment Policy Statement (IPS) defines the duties and responsibilities of all parties involved.

  • The IPS defines diversification and rebalancing guidelines.

  • The IPS defines due-diligence criteria for selecting investment options.

  • The IPS defines the monitoring criteria for investment options and service vendors.

  • The IPS defines the procedures for controlling and accounting for investment expenses.

  • The IPS defines appropriately structured, socially responsible investment strategies (when applicable).

  • The investment strategy is implemented in compliance with the required level of prudence.

  • The fiduciary is following applicable safe harbor provisions (when elected).

  • Investment vehicles are appropriate for the portfolio size.

  • A due-diligence process is followed in selecting service providers, including the custodian.

Implement Investment Policy

  • Periodic reports compare investment performance against appropriate index, peer group, and IPS objectives.

  • Periodic reviews are made of qualitative and/or organizational changes of investment decision makers.

  • Control procedures are in place to periodically review policies for best execution, soft dollars, and proxy voting.

  • Fees for investment management are consistent with agreements and the law.

  • Finders fees, 12b-1 fees, or other forms of compensation that may have been paid for asset placement are appropriately applied, utilized, and documented.

Monitor and Supervise