A fiduciary is a person who has the responsibility of managing affairs on behalf of another. Sometimes the appointment to act as a fiduciary is formal such as in a Trust Deed. In many other instances, those who offer professional advice to their clients take on fiduciary responsibilities by way of the relationship which has been established. It is important to limit the scope and extent of professional responsibility and engage others when needed.
In today’s marketplace it is very difficult to work out how to do this in a way that protects client relationships or the need to preserve professional integrity. This is where an Accredited Investment Fiduciary (AIF) can be a true ally. AIF is the term used by those who have undertaken study through fi360 Australasia in association with the Foundation for Fiduciary Studies, University of Pittsburgh, USA.
A key benefit of using an AIF is to help stay out of trouble! Most investment litigation stems from not having or not following certain fiduciary practices or procedures. Those who engage an AIF will be able to demonstrate a clearly defined process is in place and follow to manage investment decisions. Common themes run through various pieces of New Zealand legislation and case law concerning how to manage investments. They are:
- Know the standards, laws and trust provisions.
- Diversify assets in relation to risk/return requirements.
- Prepare, maintain and follow a properly written Investment Policy Statement.
- Engage prudent experts and monitor their activities.
- Control and account for all expenses.
- Avoid conflicts of interest and do not engage in prohibited transactions.
We can support you in your fiduciary role by ensuring you comply with all of these.
You can link directly to fi360 Australasia for more information.
If your client wants truly impartial advice, contact us to find out how we can help them put their money to work to fund their important goals.
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