Overview
This article highlights Fi360's Prudent Practices®, a foundational framework for fiduciary investment strategies in compliance with legal and ethical standards. The Practices are structured into four key steps: organizing fiduciary roles, formalizing investment policies, implementing investment decisions, and monitoring portfolios. These practices underpin Fi360's fiduciary training programs and tools, enabling advisors to apply best practices consistently.
The Prudent Practices®
Everything Fi360 does is rooted in our Prudent Practices®. First published in 2003, the Prudent Practices® handbooks comprise a step-by-step process that ensures a fiduciary investment strategy is properly developed, implemented and monitored according to both legal and ethical obligations. The Prudent Practices® are organized into four steps a fiduciary should follow when working with wealth management, retirement and nonprofit clients:
- Organize. Fiduciary roles and responsibilities are clearly documented and defined.
- Formalize. The investment policy is consistent with objectives for the portfolio and risk and return assumptions.
- Implement. Decisions regarding investments and services are implemented in accordance with the duties of loyalty and care.
- Monitor. The portfolio is monitored regularly to ensure consistency with benchmarks and overall objectives.
Each practice has been substantiated by applicable legislation, regulation and/or case law to ensure compliance. Full citations, as well as detailed criteria, narrative discussion, practical application and suggested procedures can be found in the Prudent Practices® handbooks.
The Prudent Practices® form the basis of our fiduciary training programs so that students can understand and be able to apply best practices for acting as an investment fiduciary. They also form the basis for our fiduciary tools, including the Fiduciary Focus Toolkit®, so that advisors can easily implement fiduciary best practices for their clients.
For more information on the Prudent Practices® handbooks, visit https://www.fi360.com/resources/prudent-practices/.