Independent Assessment Report
Ingham Russell Investment Advisors Inc.
CEFEX Investment Advisor Certification
Investment Advisor Definition
A fiduciary who is responsible for managing a client’s overall investment strategy, which may include deciding on the client’s asset allocation, developing the client’s investment strategy, implementing the strategy with appropriate Investment Managers, and monitoring the strategy, on a one-time or ongoing basis. The term refers to those who provide specific or comprehensive investment advice including financial advisors, broker-consultants, investment consultants, wealth managers, financial consultants trust officers, financial planners and fiduciary advisers.
SECTION 1 – COMPANY INFORMATION |
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| CEFEX File No.: |
CFX10002 |
| Company Name: |
Ingham Russell Investment Advisors Inc. |
| Address: | 9155 S. Dadeland Blvd., Suite 1512 Miami FL 33156-2737 US |
| Phone: | 305-671-2200 |
SECTION 2 – ASSESSMENT DETAILS |
|
| Date of Registration: | 2023.09.13 |
| Assessment Number: | R17 |
| Assessment Team: | |
| Position | Name | Company |
|---|---|---|
| Analyst | Donald K. Denton | Roland Criss Fiduciary Services |
| Client | Melissa Banaszak | Ingham Russell Investment Advisors Inc. |
CEFEX Registration Committee (CRC)
The CEFEX Registration Committee is responsible for ensuring the consistency, impartiality and technical merit of CEFEX assessments. The members include fiduciary experts and senior CEFEX Analysts.
Attestation
The Analyst is independent of the registered firm. He/she has not been employed or compensated by the registered firm for a period of at least 2 years prior and 6 months following this assessment, for the purposes of providing fiduciary consulting services. The Analyst is an Accredited Investment Fiduciary Analyst (AIFA®) and has the adequate expertise and proficiency to perform this assessment.
Purpose and Scope of this Assessment:
To evaluate the Advisor’s conformance to the practices and associated criteria as defined in the document “Prudent Practices for Investment Advisors” (the Standard) for the declared scope of registration. A full copy of the Standard which is the basis for this assessment, can be found in the Prudent Practices Handbook here.
The scope of registration is as follows:
ERISA DB Plans, ERISA DC Plans, Personal Trusts, High Net Worth and readiness to serve as a fiduciary adviser, as defined by the Pension Protection Act of 2006.
Summary of Assessment Methodology:
The assessment requires that the Analyst plan and perform a review of a representative sample of the Advisor’s written records, interviews with appropriate personnel and, on a test basis, collect evidence supporting the actions taken by the Advisor in providing services to its clients. Sampling of records was conducted in accordance with the statistical guidelines used by the International Organization for Standardization, which requires a maximum sample size equal to the square root of the total available records.
Assessment elements include:
- Background check (performed at initial assessment), including ADV, FINRA BrokerCheck (if applicable) and civil lawsuit databases.
- Document review including Investment Policy Statement, Investment Committee minutes, client performance reports, RFP’s in the selection of service providers, written evidence of Investment Manager reviews, and service agreements.
- Comparison of capital market inputs for asset allocation model assumptions to a benchmark
- Comparison of risk and return models to a benchmark
- Comparison of investment due diligence screens to a standard threshold
- Review of actual investments using a standard fiduciary scoring system. The Fiduciary Score is a measure of an investment’s position relative to a group of peers, using factors such as track record, assets, management tenure, style consistency, etc. over a period of three years.
- Review of arrangements with custodians, brokers and other service providers.
SECTION 3 - ASSESSMENT FINDINGS
The following Practices were assessed within the 3 months prior to the Date of Registration shown above and found to be in conformity.
Show All Details Hide All Details Show All Substantiations Hide All Substantiations
| No. | Practice | Status |
|---|---|---|
| 1.1 | Demonstrate an awareness of fiduciary duties and responsibilities Show Detail Hide Detail Show Substantiation Hide Substantiation | Conformity |
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Detail 1.1.1 The Investment Advisor complies with all laws and rules that apply to the services the Advisor is providing. 1.1.2 The Investment Advisor complies with all applicable Practices and Procedures defined in this Prudent Practices handbook. 1.1.3 The Investment Advisor adheres to all applicable standards of conduct and code(s) of ethics required by law, regulation, employers, and professional organizations. |
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Substantiation
Employee Retirement
Income Security Act of 1974 [ERISA] §404(a)(1) Setting Every Community Up for Retirement Enhancement Act of 2019 §204 Regulations 29 C.F.R. §2550.404a-1 Final Rule – Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights (Dec. 1, 2022) Final Rule – Prohibited Transaction Exemption 2020-02, Improving Investment Advice for Workers
& Retirees (Dec. 18, 2020) Notice – Return of PTEs 75-1,
77-4, 80-83, 83-1,
84-24 and 86-128
to pre-2016 Fiduciary Rule form, (July 7, 2020) Case law Hughes v. Northwestern University, 595 U.S. (2022);
Tibble v. Edison, Int’l, 135 S. Ct. 1823, 59 E.B.C.
2461 (2015), on remand 843 F.3d 1187 (9th Cir. 2016) and 2017 WL 3523737
(C.D. Cal. 2017); Tussey v. ABB, Inc., 2012 WL 1113291
(W.D. Mo. 2012), aff’d in part 2014 WL 1044831 (8th Cir. 2014) and 2017 WL 929202 (8th Cir. 2017), Braden v. Wal-Mart Stores,
Inc., 588 F.3d 585 (8th Cir. 2009), 6:08-cv-03109-GAF
(W.D. Mo. 2012); Marshall v. Glass/Metal Association and Glaziers
and Glassworkers Pension
Plan, 507 F. Supp.378 (D. Hawaii 1980); Katsaros v. Cody, 744 F.2d 270 (2d Cir. 1984), cert. denied, Cody v. Donovan,
469 U.S. 1072, 105 S. Ct. 565, 83 L. Ed. 2d 506 (1984);
Donovan v. Mazzola,
716 F. 2d 1226, 4 E.B.C. 1865
(9th Cir. 1983), cert. denied,
464 U.S. 1040, 104 S. Ct. 704, L.Ed.2d 169 (1984); Fink v. National
Savings and Trust
Company, 772 F. 2d 951 (D.C. Cir. 1985); Metzler
v. Graham, 112 F.3d 207 (5th Cir.
1997) Robinhood Financial LLC v. Sec’y of the Commonwealth, 214 N.E. 3d 1058 (Mass. 2003) Other Staff
of the U.S. Securities and Exchange Commission, Study on Investment
Advisers and Broker Dealers, As Required by Section 913
of the Dodd-Frank Act (Jan. 2011) Investment Advisers Act of 1940 [IAA] §202(a)(11) [Definition of an ‘Investment Adviser’] §206(1), (2), (3), (4) [Anti-fraud provisions that apply to adviser’s fiduciary obligations] §203A(a)(1) [State authority over “small” RIAs] Regulations Investment Advisers Act Rule 203-1 [Application for Investment Adviser Registration] Investment Advisers Act Rule 204-2 [Books and Records to Be Maintained by Investment Advisers] Investment Advisers Act Rule 204-5 [Delivery of Form CRS] Investment
Advisers Act Rule 204A-1 [Investment Advisers Codes of Ethics] Investment Advisers
Act Rule 206(4)-1 [Investment Adviser Marketing]
Investment Advisers Act Rule 206(4)-6 [Proxy Voting
by Investment
Advisers] Investment Advisers
Act Rule 206(4)-7 [Compliance Procedures and Practices for Investment Advisers] Case law SEC v.
Tambone, 550 F.3d 106, 146 (1st Cir. 2008); Scott E. DeSano, et al., SEC Adm
Proc 3-12879A (Mar. 6, 2008); Strong Capital Management, Inc., et al., Investment Company Act Release No. 26448
(May 20, 2004); SEC v. Capital Gains Research Bureau, 375 U.S. 180 (1963);
Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 17 (1979); Hughes
v. SEC, 174 F.2d 969 (D.C. Cir. 1949) Other Securities
and Exchange Commission Interpretation
Regarding Standard of Conduct for
Investment Advisers (July
12, 2019) SEC Staff Bulletin: Standards of Conduct for Broker-Dealers and Investment Advisers Care
Obligations (Apr. 20, 2023) SEC
Staff Bulletin: Standards of Conduct for
Broker-Dealers and Investment Advisers
Account Recommendations for Retail Investors (last updated March 39, 2022) Securities and Exchange Commission Risk Alert: Observations from Examinations of Newly-Registered
Advisers (March 27, 2023). Unethical Business Practices Of Investment Advisers,
Investment Adviser Representatives, And
Federal Covered Advisers, NASAA Model Rule 102(a)(4)-1
(Adopted Apr. 27, 1997, Amended Apr. 18, 2004, Sept. 11, 2005, Nov. 6, 2017, May 19, 2019, and May 16, 2022.) Code of Ethics Guidance
for Investment Advisers, i.e.,
personal securities transactions (June 26, 2015) State
Insurance Regulation Suitability and Best Interests in Life Insurance and Annuity Transactions, New York Dep’t. of Fin. Svcs.
(11 NYCRR 224) (Adopted July 17, 2018; effective Aug. 1, 2019). The regulation, known as Insurance
Regulation 187, was ultimately upheld by the highest court in New York State, the
Court of Appeals. Matter of Independent Insurance Agents and Brokers
of New York, Inc., et al. v. New York State Department of Financial Services,
et al., 39 N.Y.3d 56 (2022). Model Insurance
Rule 2020 Revisions to Model #275 Suitability in Annuity Transactions Model
Regulation (Spring 2020); Adopted in 11 states as of 5/18/21; Annuity Suitability & Best Interest
Standard (naic.org) Applicability of the Investment
Advisers Act to Financial Planners, Pension Consultants, and Other
Persons Who Provide Investment Advisory Services as a Component
of Other Financial Services, SEC Interpretive Release No.
IA-1092, (Oct. 8, 1987) Uniform Prudent
Investor Act [UPIA] §1(a); §2(a); §2(d) Uniform Prudent
Management of Institutional Funds Act [UPMIFA] §3(b); §3(c) Model Management of Public
Employee Retirement Systems Act [MMPERSA] §7 Case law Harvard College
v. Amory, 26 Mass. 446, 9 Pick.
454 (1830); Davoue v.
Fanning, 2 Johns. Ch. 252 (N.Y. 1816); Fulton v. Whitney, 66 N.Y. 548 (1876);
and National Labor Relations Board v. Amax Coal Co., 453 U.S. 322, 101 S. Ct. 2789, 69 L.Ed. 2d 672 (1981) |
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| 1.2 | Provide investments and investment services consistent with governing documents. Show Detail Hide Detail Show Substantiation Hide Substantiation | Conformity |
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Detail 1.2.1 Investments are managed and investment services are provided in accordance with governing documents, including documents establishing the terms of an account or client engagement and the investment policy statement. 1.2.2 Documents pertaining to the investment management process, including records of decisions made by fiduciaries and clients, are secure and readily and reliably accessible by authorized persons. |
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Substantiation
Employee Retirement
Income Security Act of 1974 [ERISA] §3(38)(C); §104(b)(4); §402(a)(1); §402(b)(1); §402(b)(2); §403(a); §404(a)(1)(D); §408(b)(2) Regulations Prudence
and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights,
87 Fed. Reg. 73822 (Dec.
1, 2022) (codified at 29 C.F.R. pt. 2550) Case law LaRue
v. DeWolff, Boberg & Associates, Inc., 552 U.S. 248 (2008); Tussey v. ABB Inc.,
746 F.3d 327 (8th Cir. 2014); Liss v. Smith,
991 F. Supp. 278, 1998
(S.D.N.Y. 1998); Dardaganis v. Grace Capital, Inc., 664 F. Supp. 105 (S.D.N.Y.
1987) aff’d, 889 F.2d 1237 (2d Cir. 1989); White v. Martin, 286 F. Supp.
2d 1029 (D. Minn. 2003) Other DOL Field Assistance Bulletin (FAB) 2007-01 Investment Advisers Act of 1940 [IAA] §204(a); §205 Regulations SEC Advisers
Act Rule 204-2
[Books and records
to be maintained by
investment advisers.] Case law In the Matter of Blackstone Alternative Credit Advisors LP, Blackstone Management Partners L.L.C. and
Blackstone Real Estate Advisors LP,
Advisers Act Release No. 6812 (Jan. 13, 2025); In the Matter of Colony Capital
Investment Advisors, LLC, Investment Advisers Act Release No. 6671 (Sep. 3,
2024); In the Matter of Covenant Financial Services, LLC and Stephen Shafer,
Investment Advisers Act Release No. 4672 (Mar. 29, 2017); In the Matter of
Calvert Investment Distributors, Inc. and
Calvert Investment Management, Inc., Investment Advisers Act Release
No. 4696 (May 2, 2017); In the Matter of Aisling Capital LLC,
Investment Advisers Act Release No. 4951 (June 29, 2018) Other Twelve Firms to Pay More Than $63 million Combined to Settle SEC’s Charges for Recordkeeping Failures, SEC Press Release
2025-6 (Jan. 13, 2025);
Form ADV and Investment Advisers
Act Rules, Investment Advisers Act Release No. 4509
(August 25, 2016); Recordkeeping Requirements
for Investment Advisers, NASAA Model Rule 203(a)-2, (Adopted Sept. 3,
1987, amended May 3, 1999, Apr. 18, 2004, and Sept. 11, 2005) Uniform Prudent Investor Act [UPIA] §1(b); §2(a)–(d); §4 Uniform Prudent Management of Institutional Funds Act [UPMIFA] §3(a); §3(b); §3(c);
§3(e); §5(a) Model Management of Public
Employee Retirement Systems Act [MMPERSA]
§4(a)–(d); §7(6); §8(b) |
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| 1.3 | Document the roles and responsibilities of all parties, whether fiduciaries or non-fiduciaries. Show Detail Hide Detail Show Substantiation Hide Substantiation | Conformity |
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Detail 1.3.1 All involved parties have acknowledged their roles and responsibilities and fiduciary or non-fiduciary status in writing. 1.3.2 Each investment committee formed, controlled, or required by the investment advisor has a defined set of by-laws or operating procedures to which the committee adheres. |
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Substantiation
Employee Retirement
Income Security Act of 1974 [ERISA] §3(38)(C); §402(a)(1); §402(b); §403(a)(2); §404(a)(1)(B); §404(c); §405(c)
Regulations 29 C.F.R.
2550.408(b)-2(c)(1)(iv)(B); Prohibited Transaction Exemption (PTE) 2020-02,
Improving Investment Advice for Workers & Retirees, 85 Fed. Reg. 82798
(Dec. 18, 2020)
Case law Marshall v. Glass/Metal
Association and Glaziers and Glassworkers Pension Plan, 507 F. Supp. 378 1 (D. Hawaii 1980); Katsaros
v. Cody, 744 F.2d 270, 5 E.B.C. 1777 (2d Cir. 1984), cert. denied, Cody v. Donovan, 469 U.S. 1072
(1984); Marshall v. Snyder, 430 F. Supp. 1224 (E.D.N.Y. 1977),
aff’d,572 F.2d 894 (2d Cir. 1978); Donovan v. Mazzola, 716 F.2d 1226 (9th
Cir. 1983), cert. denied, 464 U.S. 1040, 104 S. Ct. 704 (1984); Fink v.
National Savings and Trust Company, 772 F. 2d 951 (D.C. Cir. 1985); Ellis v.
Rycenga Homes, 484 F. Supp. 2d 694 (W.D. Mich. 2007); Jenkins v. Yager, 444 F.3d
916 (7th Cir. 2006)
Other Department of Labor Field
Assistance Bulletin (FAB) 2007-01 Meeting
Your Fiduciary Responsibilities, EBSA, Date of publication
unknown Fiduciary
Responsibilities, EBSA, Date of publication unknown
Investment
Advisers Act of 1940 (IAA) §205(a)(2) Compliance Programs of
Investment Companies and Investment Advisers, Advisers Act
Release No. 2204 (Dec. 17, 2003) [68 FR 74714 (Dec. 24, 2003)];
amended Aug. 23, 2023
Other Risk Alert: Observations
from Examinations of Newly-Registered Investment
Advisers, prepared by the SEC Division of Examinations (Mar. 27,
2023) Uniform
Prudent Investor Act [UPIA] §1(a); §2(a); §2(d);
§9(a)(1) and (2)
Other Restatement of Trusts 3d:
Prudent Investor Rule §171 (1992) Uniform Prudent Management of Institutional
Funds Act [UPMIFA] §3(b); §3(c)
Model
Management of Public Employee Retirement Systems Act [MMPERSA] §6(a) and (b); §7; §8(b)
Case law National Labor Relations
Board v. Amax Coal Co., 453 U.S. 322, 101 S. Ct. 2789,
69 L. Ed. 2d 672 (1981) Sacerdote v. N.Y. Univ., S.D.N.Y., No. 1:16-cv-06284-KBF (2018) |
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| 1.4 | Identify, then avoid or manage, material conflicts of interest in a manner consistent with the duty of loyalty. Show Detail Hide Detail Show Substantiation Hide Substantiation | Conformity |
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Detail 1.4.1 Policies and procedures for overseeing and managing conflicts of interest, including to avoid self-dealing and making false or misleading statements, are defined and followed. 1.4.2 Conflicts of interest are avoided when prohibited by law and/or governing documents. 1.4.3 Conflicts of interest that are not avoided must be managed in the client’s best interest. 1.4.4 Conflicts of interest that are not avoided must be disclosed to the client and informed client consent must be obtained. |
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Substantiation
Internal
Revenue Code of 1986, as amended [IRC] §4975(c)(1)(E) and (F); §4975(d) Employee Retirement Income Security
Act of 1974 [ERISA] §3(14)(A) and (B); §404(a)(1)(A); §405(a); §406(a) and (b); and §408 Regulation 29 C.F.R.
§2550.408(b)-2(b), (c), and (e) Case law Whitfield v. Tomasso, 682 F. Supp. 1287 (E.D.N.Y
1988); Tussey v. ABB, Inc., 746 F.327 (8th Cir. 2014). Other DOL ERISA Advisory Council,
Outsourcing Employee
Benefit Plan Services, U.S.
Department of Labor (2014) DOL
ERISA Advisory Council, Mandated Disclosure for
Retirement Plans – Enhancing Effectiveness for Participants and Sponsors, U.S. Department of Labor (2017) DOL Advisory
Council, Fiduciary Responsibilities and Revenue Sharing Practices,
(Nov. 7, 2007) DOL Prohibited Transaction Exemption 2020-02, 85 Fed. Reg. 82798 (Dec. 8, 2020) Investment Advisers Act of 1940 [IAA] §206(1) and (2) Regulation 17 C.F.R.
§275.204-3; 17 C.F.R.
§275.204A-1; 17 C.F.R.
§275.206(4)-7 Prohibitions and Restrictions on
Proprietary Trading and Certain Interests in, and Relationship with, Hedge Funds and Private
Equity Funds, SEC
Release BHCA-9 (June 25, 2020) Form CRS Relationship Summary;
Amendments to Form ADV,
34-86032, IA-5247 (June 5, 2019) Case law In the
Matter of Credit Suisse Securities (USA) LLC, Investment Advisers Act Release
No. 4678 (Apr. 4, 2017); In the Matter of Cadaret, Grant & Co., Inc. Investment Advisers Act Release
No. 4736 (Aug. 1, 2017); In
the Matter of Institutional Investors Advisory Company, Investment Advisers Act
Release No. 4747 (Aug. 16, 2017); In the Matter of Envoy Advisory, Inc., SEC Investment Advisers Act Release No. 4764 (Sept. 8, 2017); In the Matter of
Suntrust Investment Services, Inc., SEC Investment Advisers Act Release No. 4769 (Sept. 14, 2017); In the Matter of Financial Fiduciaries, LLC and Thomas Batterman, Investment Advisers Act Release No. 4863 (Mar. 5, 2018); In the Matter of
Securities America Advisors, Investment Advisers Act Release No. 4876 (Apr. 6, 2018); In the Matter of WCAS
Management Corporation, Investment Advisers Act Release No. 4896
(Apr. 24, 2018); In the Matter of Lyxor Asset Management, Inc., Investment
Advisers Act Release No. 4932 (June 4, 2018); In the Matter of Michael Devlin,
Investment Advisers Act Release No. 4973
(July 19, 2018); In the Matter of American Infrastructure Funds, LLC,
Investments Advisers Act Release 6428 (Sep. 22, 2023); In the Matter of Closed Loop Partners, LLC,
Investment Advisers Act Release No. 6712 (Sep. 20, 2024) Other Commission Interpretation Regarding Standard of Conduct for Investment Advisers, 84
Fed. Reg. 33669 (July 12, 2019) Staff
Bulletin: Standards of Conduct for
Broker-Dealers and Investment Advisers
Account Recommendations for Retail Investors (FAQ) (Updated Mar. 30, 2022) Staff
Bulletin: Standards of Conduct for
Broker-Dealers and Investment Advisers Conflicts of
Interest (FAQ) (Aug. 3, 2022) Risk Alert: Division of Examinations
Observations: Investment Advisers’ Fee Calculations (Nov. 10, 2021) Risk Alert:
Observations from Examinations of Investment Advisers Managing Client Accounts That
Participate in Wrap Fee Programs (July
21, 2021) Risk Alert: OCIE Observations: Investment Adviser
Compliance Programs (Nov. 19, 2020) Risk Alert:
Observations from OCIE’s Examination of Investment Advisers: Supervision,
Compliance and Multiple Branch Offices (Nov.
9, 2020) Risk Alert: Observations from Examinations of Investment Advisers: Compliance, Supervisions, and
Disclosure of Conflicts of Interest (July
23, 2019) Risk Alert:
Examinations that Focus on Compliance with Form CRS (Apr. 7, 2020) Heitman Capital Management et al., SEC No-Action Letter (Feb. 12, 2007); NASAA Unethical Business
Practices of Investment Advisers, Investment Adviser Representatives, and Federal Covered Advisers, Model Rule 102(a)(4)-1 (Adopted April 27, 1997, Amended
April 18, 2004 and Sept.
11, 2005) SEC Share Class Selection
Disclosure Initiative (updated on May 1, 2018) Securities Exchange
Act of 1934 Regulation Updated Disclosure Requirements
and Summary Prospectus for Variable Annuity and Variable Life Insurance Contracts, 33-10765, etc. (May 18, 2020) Regulation Best Interest: The Broker-Dealer Standard
of Conduct,
34-86031 (June 5, 2019) Form CRS Relationship Summary;
Amendments to Form ADV, 34-86032,
IA-5247 (June 5, 2019) Other Risk Alert: Observations from Broker-Dealer Examinations Related to Regulation Best Interest (Jan. 30, 2023) Staff
Bulletin: Standards of Conduct for Broker-Dealers
and Investment Advisers Conflicts of Interest (FAQ) (Aug. 3, 2022) Risk Alert: Examinations that Focus on Compliance with Regulation Best Interest (Apr. 7, 2020) Risk Alert:
Examinations that Focus on Compliance with Form CRS (Apr. 7, 2020) Interpretative Rule: Commission
Interpretation Regarding Standard of Conduct for Investment
Advisers IA-5248 (June 5, 2019) State Securities Laws Regulation NASAA Model
Rule for Investment Adviser Written Policies and Procedures Under the Uniform
Securities Acts of 1956 and 2002 (Adopted 11/24/2020)
State
Insurance Laws Regulation Model #275: Suitability in Annuity Transactions Model
Regulation (Spring 2020) Other MDL #275 Best Interest
Standards Revisions (FAQs) (May 10,
2021) Uniform Prudent Investor Act [UPIA] §2; §5
Uniform Prudent Management of Institutional Funds Act [UPMIFA] Prefatory Note Model Management of Public
Employee Retirement Systems Act [MMPERSA]
§7(1) and (2); §17(c)(12) and (13) |
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| 1.5 | Execute written agreements that are consistent with fiduciary obligations. Show Detail Hide Detail Show Substantiation Hide Substantiation | Conformity |
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Detail 1.5.1 The investment advisor fully discloses in writing all compensation arrangements and affiliations associated with the service agreement. 1.5.3 If the investment advisor is responsible for oversight of other service providers, the advisor must evaluate all material compensation, affiliations, and the fiduciary status of each service provider. 1.5.4 Agreements are periodically reviewed to ensure consistency with the needs of the client. 1.5.5 Comparative reviews of service agreements for which the Investment Advisor is responsible are conducted and documented approximately every three years. |
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Substantiation
Internal
Revenue Code of 1986, as amended [IRC] §4975(d)(2)
Employee
Retirement Income Security Act of 1974 [ERISA] §3(38)(C); §402(c)(2) and
(3); §403(a)(2); §404(a)(1)(A)(ii); §408(b)(2)(A)
Case law Liss v. Smith, 991 F. Supp.
278 (S.D.N.Y. 1998); Whitfield v. Tomasso, 682 F.Supp. 1287, (E.D.N.Y. 1988);
George v. Kraft Foods Global, Inc., 641 F.3d 786 (7th Cir. 2011)
Regulations 29 C.F.R. §2550.408b-2
generally and specifically subsections (c) and (d)
Other DOL Field Assistance
Bulletin 2007-01; DOL Field Assistance Bulletin 2012-02R
Investment
Advisers Act of 1940 (IAA) §206(1) and (2)
Case law In the Matter of Central
States Capital Markets, LLC, et. al, Investment Advisers Act Release No. 4352
(Mar. 16, 2016); In the Matter of Potomac Asset Management Co., Inc., et al.,
Investment Advisers Act Release No. 4766 (Sept. 11, 2017); In the Matter of
Platinum Equity Advisors, LLC, Investment Advisers Act Release No. 4772 (Sept. 21, 2017); In the Matter of
TPG Capital Advisors, LLC, Investment Advisers Act Release No. 4830 (Dec. 21,
2017); In the Matter of Aberon Capital Management, LLC & Joseph Krigsfield,
Investment Advisers Act Release No. 4914 (May 24, 2018)
Uniform
Prudent Investor Act [UPIA] §2(a); §5; §7; §9(a)(2)
Uniform
Prudent Management of Institutional Funds Act [UPMIFA] §3(b); §3(c); §5(a)
Model
Management of Public Employee Retirement Systems Act [MMPERSA]
§5(a)(2); §6(b)(2); §7 |
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| 1.6 | Prudently protect sensitive personal identifying information and assets of clients from theft, embezzlement, business disruption and cybersecurity risks. Show Detail Hide Detail Show Substantiation Hide Substantiation | Conformity |
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Detail 1.6.1 The Investment Advisor has a reasonable basis to believe assets are within the jurisdiction of a viable judicial system. 1.6.2 Appropriate procedures are in place to secure and prudently protect the privacy of client or plan data. 1.6.3 Appropriate procedures are in place to assure that sensitive personal identifying information and assets of clients are prudently protected from physical, operational, virtual, and other material risks associated with business disruptions. 1.6.4 The investment advisor has a reasonable basis to believe assets are protected by appropriate insurance, bonding, internal controls, and security measures taken by fiduciaries and other service providers, including the investment advisor’s own firm. 1.6.5 The investment advisor has procedures in place to manage situations where the advisor reasonably believes that a client’s assets are at risk due to suspicious behavior by service providers, the client, or others with access to or influence over the client’s assets. 1.6.6 The investment advisor has documented a succession plan and a business continuity plan that is reviewed and tested periodically. |
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Substantiation
Internal Revenue Code of 1986, as amended [IRC], §6001 Other IRS Revenue Procedures 97-22 and 98-25 Employee Retirement Income Security
Act of 1974 [ERISA] §107; §404(b);
§405; §412(a) Regulations 29 C.F.R. §2550.404b-1 29 C.F.R.
§ 2520.104b-1 29 C.F.R. §2520.107-1 Case law Varity
Corporation v. Howe, 516 U.S. 489, 116 S. Ct. 1065, 134 L.Ed.2d 130 (1996); Estate of Barton v. ADP Security Services
Pension Plan, 820 F.3d 1060 (9th Cir. 2016) Other H.R. Report No. 931280 (93rd Congress,
2d Session, Aug. 12, 1974) DOL Field Assistance Bulletin (FAB)
2008-04 ERISA
Advisory Council on Employee Welfare and Pension Benefit Plans, Report on Cybersecurity Considerations for Benefit Plans, U.S.
Department of Labor (November 2016) ERISA
Advisory Council on Employee Welfare and Pension Benefit Plans, Recordkeeping in the Electronic Age, U.S.
Department of Labor (December 2023) News
Release: U.S. Department of Labor
Announces New Cybersecurity Guidance for Plan
Sponsors, Plan Fiduciaries, Recordkeepers, Plan Participants (Apr. 14, 2021) EBSA Tips for Hiring a Service
Provider With Strong Cybersecurity Practices (April 2021) EBSA Cybersecurity Program Best
Practices (April 2021) EBSA Online
Security Tips (April 2021) Investment Advisers Act of 1940 (IAA) 15 U.S.C.
80b Regulations Investment
Advisers Act Rule 204-2 [Books and Records to be Maintained by Investment Advisers] (reflecting updates to
recordkeeping requirements under Regulation S-P) Case law In the Matter of R.T. Jones Capital Equities Management, Inc., Investment Advisers Act Release No.
4204 (Sept. 22, 2015) Regulation S-P 17 C.F.R.
§ 248.1 et seq. Regulations Regulation S-P, 17 CFR Part 248 Subpart A; Regulation S-AM, 17 CFR Part 248, Subpart B; Regulation S-ID,
17 CFR Part 248, Subpart C Other SEC Risk Alert: Safeguarding Customer
Records and Information at Branch Offices (Apr. 26, 2023) SEC
Risk Alert: Observations from Broker-Dealer
and Investment Adviser Compliance Examinations Related
to Prevention of Identity Theft Under Regulation S-ID (Dec. 5, 2022) SEC Risk Alert: Safeguarding Client
Accounts against Credential Compromise (Sept. 15, 2020) SEC
Risk Alert: Cybersecurity: Ransomware Alert (July 10, 2020) SEC
Risk Alert: Investment Adviser
and Broker-Dealer Compliance Issues Related to Regulation S-P
– Privacy Notices and Safeguard Policies (Apr. 16, 2019) SEC Cybersecurity Risk Alert: Observations From Cybersecurity Examinations (Aug. 2017) SEC Cybersecurity Risk Alert: OCIE’s 2015 Cybersecurity Examination Initiative (Sept. 2015)
The National Institute of Standards and Technology Cybersecurity Framework (CSF) 2.0 suggests a five-part framework
for managing cybersecurity risk. |
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| 2.1 | Identify an investment time horizon for each investment objective. Show Detail Hide Detail Show Substantiation Hide Substantiation | Conformity |
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Detail 2.1.1 Sources, timing, distribution, and uses of each client's cash flows are documented. 2.1.2 In the case of an individual investor, an appropriate asset/liability study has been factored into the time horizon. 2.1.5 In the case of a foundation or endowment, a schedule of expected receipts and disbursements of gifts and grants has been factored into the time horizon to the extent possible and an estimated equilibrium spending rate has been established. |
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Substantiation
Internal
Revenue Code of 1986, as amended [IRC] Other IRS Notice 2014-66
Employee
Retirement Income Security Act of 1974 [ERISA] §3(34); §404(a)(1);
§404(a)(1)(C); §404(c)
Regulations 29 C.F.R.
§2550.404a-1(b)(1)(A); 29 C.F.R. §2550.404a-1(b)(2); 29 C.F.R. §2550.404c-5
(Preamble); 29 C.F.R. §2509.08-1; §2509. 96-1; Pension Benefit
Statements-Lifetime Income Illustrations, 85 F.R. 59132 (Sept. 18, 2020);
Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder
Rights, 87 F.R. 73822 (Dec. 1, 2022)
Case Law Metzler v. Graham, 112 F.3d
207 (5th Cir. 1997)
Other Interpretive Bulletin 96-1,
29 C.F.R. §2509.961; H.R. Report No. 1280, 93d Congress, 2d Session (1974);
ERISA Opinion Letter 2006-08A (Oct. 3, 2008); Target Date Retirement Date Funds
– Tips for ERISA Plan Fiduciaries, US Department of Labor, Employee Benefit
Security Administration (February 2013); DOL Information Letter to Mark Iwry
(Oct. 23, 2014); DOL Advisory Council on Employee Welfare and Pension Benefit
Plans Report on Participant Plan Transfers and Account Consolidation
for the Advancement of Lifetime Plan Participation (November 2016); GAO Report
on 401(k) Plans: DOL Could Take Steps to Improve Retirement Income Options for
Plan Participants (Sept. 8, 2016); DOL Information Letter to Jon Breyfogle
(June 3, 2020); U.S. Department of Labor Supplemental Statement on Private
Equity in Defined Contribution Plan Designated Investment Alternatives (Dec.
21, 2021)
Investment
Advisers Act of 1940 §206
Case Law SEC v. Capital Gains
Research Bureau, 375 U.S. 180 (1963); In re George Sein Lin, Investment
Advisers Act Release No. 1174 (June 19, 1989); In re David A. King and King
Capital Corp., Investment Advisers Act Release No. 1391 (Nov. 9, 1993); In the
Matter of One Oak Capital Management, LLC and Michael DeRosa, Investment
Advisers Act Release No. 6855 (Feb. 14, 2025)
Other SEC
Staff Bulletin: Standards of Conduct for Broker-Dealers and Investment
Advisers Account Recommendations for Retail Investors
(last updated March 30, 2022) Commission
Interpretation Regarding Standard of Conduct for Investment
Advisers, 84 Fed. Reg. 33669 (July 12, 2019) Suitability of
Investment Advice Provided by Investment Advisers, Investment Advisers Act
Release No. 1406 (Mar. 16, 1994) The Value of Goals-Based
Financial Planning by David Blanchett, CFP®, CFA. Journal of Financial Planning
28(6): 42–50
Uniform
Prudent Investor Act [UPIA] §2(a); §2(b); §2(c); §4; §6
Uniform
Prudent Management of Institutional Funds Act [UPMIFA] §3
Model
Management of Public Employee Retirement Systems Act [MMPERSA]
§7; §7(4) (Comments); §8;
§10(b) |
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| 2.2 | Identify an appropriate risk level for the portfolio. Show Detail Hide Detail Show Substantiation Hide Substantiation | Conformity |
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Detail 2.2.1 The expected volatility of the portfolio is understood by the investment advisor and communicated to the client, and the quantitative and qualitative factors that were considered are documented. 2.2.2 “Large loss” scenarios have been identified and considered in establishing the portfolio’s risk level. 2.2.3 Expected disbursement obligations and contingency plans have been considered when establishing liquidity requirements for the portfolio and assessing the capacity to assume portfolio risk. 2.2.4 In the case of a defined contribution retirement plan, the investment options provide for a reasonable range of participant risk tolerance levels. |
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Substantiation
Employee Retirement
Income Security Act of 1974 [ERISA] §105(a)(2)(D); §402(b); §404(a)(1)(B); §404(a)(1)(C); §404(e)
Regulations 29 C.F.R. §2550.404a-1(b)(1)(A); 29 C.F.R. §2550.404a-1(b)(2); 29 C.F.R. 2550.404c-1 (Preamble) Case Law Laborers
National Pension Fund v. Northern Trust Quantitative Advisors, Inc., 173 F.3d 313 (5th Cir.), reh’g and reh’g en banc denied,
184 F.3d 820 (5th Cir.), cert. denied, 528 U.S. 967, 120 S. Ct. 406, 145 L. Ed. 2d 316 (1999); Metzler
v. Graham, 112 F.3d 207 (5th Cir.1997); State Street Bank and Trust Co. ERISA Litigation, No. 7 Civ. 8488 (S.D.N.Y. 2012)
Other DOL
Advisory Council on Employee Welfare
and Benefit Plans
Report Hedge Funds and Private Equity Investments (November 2011); DOL
Information Letter to Jon Breyfogle (June 3, 2020); U.S. Department of Labor
Supplemental Statement on Private Equity in Defined Contribution Plan Designated Investment Alternatives (Dec. 21, 2021) Investment Advisers
Act of 1940 Case Law In re
Westmark Financial Services Corp., Investment Advisers Act Release No. 1117 (May 16, 1988);
In re David A. King and King Capital
Corp., Investment Advisers
Act Release No. 1391 (Nov. 9, 1993); In re George
E. Brooks & Assocs., Inc., Investment Advisers
Act Release No. 1746 (Aug. 17, 1998); In the Matter of
Philip A. Lehman, Investment Advisers Act Release No. 1831 (Sept. 22, 1999)
Other Staff
Bulletin: Standards of Conduct for Broker-Dealers and Investment
Advisers Care Obligations, (Apr. 20, 2023) Commission
Interpretation Regarding Standard of Conduct for Investment
Advisers, 84 Fed. Reg. 33669 (July 12, 2019) Suitability of
Investment Advice Provided by Investment Advisers, Investment Advisers Act Release No.
1406 (Mar. 16, 1994)
Uniform
Prudent Investor Act [UPIA] §2(a), (b), and (c); §2 Comments
Case Law In the Matter of the Judicial
Settlement of the Final Account of E. Barker, 801 N.Y.S. 2d 778 (2005),
citing Matter of Rothko, 43 N.Y.2d 305 320 (1977)
Uniform
Prudent Management of Institutional Funds Act [UPMIFA] §3
Model
Management of Public Employee Retirement Systems Act [MMPERSA] §7; §8; §8 Comments
Other Renzulli, K. A. (Oct. 2, 2024), 5
Retirement Fears and How to
Conquer Them |
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| 2.3 | Evaluate the distribution of projected portfolio returns in context of the client’s risk and return objectives. Show Detail Hide Detail Show Substantiation Hide Substantiation | Conformity |
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Detail 2.3.1 The projected portfolio return is consistent with the client’s tolerance and capacity to assume volatility risk and investment goals and objectives. 2.3.2 Projected return assumptions for each asset class are based on reasonable risk-premium assumptions. 2.3.5 For endowments and foundations, the projected return values used for modeling are reasonable and are consistent with distribution requirements or the projected equilibrium spending rate. |
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Substantiation
Internal
Revenue Code of 1986, as amended [IRC] §412(c)(3); §430(h)(3)
Other IRS Notice 2014-66
Employee
Retirement Income Security Act of 1974 [ERISA] §3(34);
§302(c)(3); §304(c)(3); §404(a)(1); §404(c) Regulations 29 C.F.R. 2520.105-3; 29
C.F.R. §2550.404a-1(b)(1); 29 C.F.R. §2550.404a-1(b)(2); 29 C.F.R. §
2550.404c-1; 29 C.F.R. §2550.404c-5(e)(4)(iii) and
Preamble
Case Law Leigh v. Engle, 858 F.2d 361
(7th Cir. 1988); Jones v. O’Higgins, 11 EBC 1660 (N.D.N.Y. 1989); GIW
Industries, Inc. v. Trevor, Stewart, Burton, & Jacobsen, Inc., 895 F.2d 729
(11th Cir. 1990); Lanka v. O’Higgins, 810 F. Supp. 379 (N.D.N.Y. 1992); Mertens
v. Hewitt Associates, 508 U.S. 248 (1993); Usenko ex rel. SunEdison
Semiconductor Ltd. V. MEMC LLC, 926 F.3d 468 (8th Cir. 2019)
Other H.R. Rep. No. 1280, 93rd
Cong., 2d Sess. 304 (1974), reprinted in 1974 U.S. Code Cong. & Admin. News
5038; Elton, Edwin J. and Gruber, Martin J., Modern
Portfolio Theory and Investment Analysis (1995); DOL Interpretive Bulletin
96-1, Participant Investment Education (29 C.F.R. §2509.96-1); U.S. Gov’t
Accountability Off., GAO-12-565, Defined Benefit Pension Plans: Recent Developments
Highlight Challenges of Ensuring Pension Plan Funding (2012); DOL Information
Letter to Mark Iwry (Oct. 23, 2014); U.S. Gov’t Accountability Off.,
GAO-23-105813, 401(k) Retirement Plans: DOL Could Better Inform Participants
About Risks in Selecting Target Date Funds with Inappropriate Asset Allocations
(2023)
Investment
Advisers Act of 1940
Case Law Jones Memorial Trust v. Tsai
Inv. Services, Inc., 367 F. Supp. 491 (S.D.N.Y 1973); In the Matter of Alfred
C. Rizzo, Investment Advisers Act Release No. 897 (Jan. 11, 1984)
Other Study
on Investment Advisers and Broker-Dealers: As Required by Section
913 of the Dodd-Frank Wall Street Reform and Consumer Protection
Act
(SEC, Jan. 21, 2011) Guidance
Update: Robo-Advisers (SEC’s Division of Investment Management,
Feb. 2017) Investor
Alert: Automated Investment Tools, (SEC and FINRA, May 8,
2015) Recommendation
of the SEC Investor Advisory Committee’s Disclosure
Subcommittee Regarding Digital Engagement Practices
[Draft] SEC Investor Advisory Committee, Nov. 17, 2023
Uniform
Prudent Investor Act [UPIA] §2(a), (b), and (c); §2(c)
comments; §3(b); §5
Case Law Donahue v. Donahue, 2010 WL
481226 (Cap. App. 4 Dist.)
Uniform
Prudent Management of Institutional Funds Act [UPMIFA] §3(b) and (e)
Model
Management of Public Employee Retirement Systems Act [MMPERSA]
§7; §7(4) (Comments);
§8(a)(1) and (3); §8(b) |
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| 2.4 | Ensure that selected asset classes are consistent with the time horizon and risk and return objectives for the portfolio. Show Detail Hide Detail Show Substantiation Hide Substantiation | Conformity |
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Detail 2.4.1 Asset classes are appropriately weighted to conform to the portfolio's specified time horizon and risk/return profile. 2.4.2 For participant-directed plans, selected asset classes provide each participant the ability to diversify their portfolio appropriately given their time horizon and risk/return profile. 2.4.3 The methodology and tools used to establish appropriate portfolio diversification are prudent and consistently applied. |
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Substantiation
Employee
Retirement Income Security Act of 1974 [ERISA] §404(a)(1)(B);
§404(a)(1)(C); §404(c)(1); §404(c)(5)
Regulations 29 C.F.R. §2550.404a-1(b);
29 C.F.R. §2550.404c-1; 29 C.F.R. §2550.404c-5; Prudence and
Loyalty in Selecting Plan Investments and Exercising Shareholder Rights, 87
Fed. Reg. 73822 (Dec. 1, 2022) (to be codified at 29 C.F.R. pt. 2550)
Case Law GIW Industries, Inc. v.
Trevor, Stewart, Burton & Jacobsen, Inc., 895 F.2d 729 (11th Cir. 1990);
Leigh v. Engle, 858 F.2d 361 (7th Cir. 1988); Lanka v. O’Higgins,
810 F. Supp. 379 (N.D.N.Y. 1992); Liss v. Smith, 991 F. Supp. 278, 301
(S.D.N.Y. 1998); Marshall v. Glass/Metal Ass’n and Glaziers and Glassworkers
Pension Plan, 507 F. Supp. 378, 384 (D. Haw. 1980); Anderson v. Intel Corp.
Inv. Policy Comm., 579 F. Supp. 3d 1133 (N.D. Cal. 2022); Lauderdale v. NFP
Retirement, Inc., No. 8:21-cv-00301-JVS-KES (C.D. Cal. Feb. 23, 2024)
Other Interpretive Bulletin
96-1(d)(3), 29 C.F.R. §2509.961(d)(3); Joint Committee on Taxation, Overview of
the Enforcement and Administration of the Employee Retirement Income Security
Act of 1974, at 12 (JCX-16- 90, June 6, 1990); Advisory Council on Employee
Welfare & Pension Benefit Plans, Report of the Working Group on Prudent
Investment Process (2006); DOL Information Letter to Jon Breyfogle
(June 3, 2020); DOL Supplemental Statement on Private Equity in Defined
Contribution Plan Designated Investment Alternatives (Dec. 21, 2021) US
Department of Labor Cautions 401(k) Plan Fiduciaries to Exercise
Extreme Care as They Consider Cryptocurrencies, DOL
news release. (Mar. 10, 2022)
Investment
Advisers Act of 1940 Case Law In re George Sein Lin,
Investment Advisers Act Release No. 1174 (June 19, 1989); In re David A. King
and King Capital Corp., Investment Advisers Act Release No. 1391 (Nov. 9, 1993)
Other Commission
Interpretation Regarding Standard of Conduct for Investment
Advisers, 84 Fed. Reg. 33669 (July 12, 2019) Brinson, G.P., Hood, L.R.,
& Beebower, G.L. (1986), Determinants of Portfolio Performance, Financial
Analysts Journal, 42(4), pp. 39-44 SEC
Office of Investor Education and Advocacy, Investor Alert: Exercise
Caution with Crypto Asset Securities, March 23, 2023
Uniform
Prudent Investor Act [UPIA] §1(a); §2(a) and (b); §3
Uniform
Prudent Management of Institutional Funds Act [UPMIFA] §3; §3(e)(4) comment
Model
Management of Public Employee Retirement Systems Act [MMPERSA]
§8(a)(2); §8(a)(2) comment;
§7(1-3); §8 (b) |
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| 2.5 | Ensure that selected asset classes are consistent with implementation and monitoring constraints. Show Detail Hide Detail Show Substantiation Hide Substantiation | Conformity |
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Detail 2.5.1 The Investment Advisor has the time, resources, knowledge and skills to implement and monitor all selected asset classes. 2.5.2 The process and tools used to implement and monitor investments in the selected asset classes are appropriate. 2.5.3 Appropriate investment products are accessible within each selected asset class. |
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Substantiation
Employee
Retirement Income Security Act of 1974 [ERISA] §404(a)(1)(B)
Regulation 29 C.F.R. §2550.404a-1(b)
Case Law Fink v. National Savings and
Trust Company, 772 F.2d 951, 957 (DC Cir. 1985); Donovan v.
Bierwirth, 680 F.2d 263 (2d Cir. 1982); Harley v. Minnesota Mining and
Manufacturing Company, 284 F,3d 901 (8th Cir. 2002); Howard v. Shay, 100 F.3d
1484 (9th Cir. 1996); Katsaros v. Cody, 744 F.2d 270 (2d Cir.), cert. denied, 469
U.S. 1072 (1984); Donovan v.
Mazzola, 716 F.2d 1226 (9th Cir. 1983), cert. denied, 464 U.S. 1040 (1984);
Laborers Nat’l. Pension Fund v. Northern Trust Quantitative Advisors, Inc., 173
F.3d 313 (5th Cir. 1999); Lanka v. O’Higgins, 810 F. Supp. 379 (N.D.N.Y. 1992)
Other H.R. Report No. 1280, 93rd
Congress, 2d Sess.304, reprinted in 1974 U.S. Code Cong. & Admin.
News 5038 (1974); U.S. Government Accountability Office, Private Pensions:
Fulfilling Fiduciary Obligations Can Present Challenges for 401(k) Plan
Sponsors, GAO-08-774 (July 2008); Congressional Research Service, Department of
Labor’s 2016 Fiduciary Rule: Background and Issues, R44884 (June 22, 2017)
Investment
Advisers Act of 1940 Case Law In Re Westmark Financial
Services Corp., Investment Advisers Act Release No. 1117 (May 16, 1988)
Other Commission
Interpretation Regarding Standard of Conduct for Investment
Advisers, 84 Fed. Reg. 33669 (July 12, 2019)
Uniform
Prudent Investor Act [UPIA] §2; §2(a) comments; §2(f)
comments; §4; §9(a)(1-3)
Other Restatement of Trusts 3d:
Prudent Investor Rule §227, comment
Uniform
Prudent Management of Institutional Funds Act [UPMIFA] §3(b) and (e); §5(a)(1)-(3)
Model
Management of Public Employee Retirement Systems Act [MMPERSA]
§6(a) and (b); §7(3); §7(3)
comments; §8(a); §8(b); §10(2) |
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| 2.6 | Confirm that the investment policy statement contains sufficient detail to define, implement, and monitor the portfolio’s investment and distribution strategies. Show Detail Hide Detail Show Substantiation Hide Substantiation | Conformity |
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Detail 2.6.1 The investment policy statement identifies the bodies of law governing the portfolio. 2.6.2 The investment policy statement defines the duties and responsibilities of all parties involved. 2.6.3 The investment policy statement specifies risk, return, and time horizon parameters. 2.6.4 The investment policy statement defines diversification and rebalancing guidelines consistent with risk, return, and time horizon parameters. 2.6.5 The investment policy statement defines the due diligence criteria for selecting investment options. 2.6.6 The investment policy statement defines procedures for controlling and accounting for investment expenses. 2.6.7 The investment policy statement defines monitoring criteria. |
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Substantiation
Employee
Retirement Income Security Act of 1974 [ERISA] §3(38); §402(a)(1);
§402(b)(2); §402(c)(3); §403(a)(2); §404(a); §404(c); §405(c)(1);
§405(d)(1); §408(g)(10)-(11)
DOL Guidance Field Assistance Bulletin
2006-01; Field Assistance Bulletin 2015-02; Field Assistance Bulletin 2016-01
Regulations 29 C.F.R.
§2550.404a-1(b)(1); §2550.404a-1(b)(2) Interpretive Bulletin
95-1;
29 CFR § 2509.95-1. (July 1, 2022)
Case Law Falberg v. Goldman Sachs
Grp., Inc., No. 22-2689 (2d Cir.) unpublished decision, Feb. 14, 2024 (i.e.,
“In fact, experts for both sides agreed that although adoption of an IPS may
represent a ‘best practice’ for fiduciaries, it is ‘not required’ that fiduciaries
adopt one in order to be found to have acted prudently.”); In re Omnicom Group,
Inc. ERISA Litigation, No. 20-CV-4141 (LJL), 2021 WL 3292487 (S.D.N.Y. Aug. 2,
2021); Snyder v. UnitedHealth Group Inc., No. 0:21-cv-01049 (D. Minn. 2021);
Brotherston v. Putnam Investments, LLC, 907 F.3d 17 (1st Cir. 2018), cert.
denied, 140 S.Ct, 911 (2020); Morrissey
v. Curran, 567 F.2d 546 (2nd Cir. 1977); Harley v. Minnesota Mining
and Manufacturing Company, 42 F. Supp. 2d 898 (D. Minn. 1999), aff’d, 284 F.3d
901 (8th Cir. 2002); Whitfield v. Cohen, 682 F.
Supp. 188 1739 (S.D.N.Y. 1988); Liss
v. Smith, 991 F. Supp. 278 (S.D.N.Y. 1988); Laborers Nat’l. Pension Fund
v. Northern Trust Quantitative Advisors, Inc., 173 F.3d 313 (5th Cir. 1999);
Lanka v. O’Higgins, 810 F. Supp. 379 (N.D.N.Y. 1992);
Katsaros v. Cody, 744 F. 2d 270, 279 (2d Cir. 1984)
Other Interpretive Bulletin 75-8,
29 C.F.R. §2509.75-8; H.R. Report No. 1280, 93rd Cong. 2d Sess. 304, reprinted
in 1974 U.S. Code Cong. & Admin. News 5038 (1974); Interpretive Bulletin
96-1, Participant Investment Education. 29 C.F.R. §2509.96-1; Elton, Edwin J.
and Gruber, Martin J., Modern Portfolio Theory and Investment Analysis (1995)
Investment
Advisers Act of 1940 Other Suitability of Investment
Advice Provided by Investment Advisers, Investment Advisers Act Release No.
1406 (Mar. 16, 1994) Commission
Interpretation Regarding Standard of Conduct for Investment
Advisers, 84 Fed. Reg. 33669 (July 12, 2019)
Uniform
Prudent Investor Act [UPIA] §2 and Comments; §3 and
Comments; §4; §7; §9(a)(1), (2), and (3)
Other Restatement of Trusts 3d:
Prudent Investor Rule §227(a) and §277; OCC Interpretive
Letter No. 722 (March 12, 1996), citing the Restatement of Trusts 3d: Prudent
Investor Rule §227, comment m (1992)
Uniform
Prudent Management of Institutional Funds Act [UPMIFA] §3(b); §3(c); §3(e); §5(a)
Model
Management of Public Employee Retirement Systems Act [MMPERSA] §6(a); §6(b)(2) and (3);
§7(2), (3), and (5); §7(5) and Comments; §8 and Comments
Other Restatement of Trusts 3d:
Prudent Investor Rule §171 and §227, comment g
Other
Resources
Prudent Practices for
Retirement Income Solutions; Defining a fiduciary standard of excellence for
selecting and monitoring retirement income solutions (Broadridge, Jan. 2024) |
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| 3.1 | Follow a prudent due diligence process to select each service provider and specific products and services. Show Detail Hide Detail Show Substantiation Hide Substantiation | Conformity |
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Detail 3.1.1 Prudent criteria are identified for each due diligence process used to select service providers. 3.1.2 The due diligence process used to select each service provider is documented. 3.1.3 Each due diligence process used to select service providers is consistently applied. |
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Substantiation
Employee
Retirement Income Security Act of 1974 [ERISA] §3(38); §402(a)(1);
§402(b)(2); §404(a)(1)(B); §405(c); §406(a)(1)(C); §408(b)(2)
Regulations 29 C.F.R. §2550.408b-2(c and
Preamble); 29 C.F.R. §2509.96-1; 29 C.F.R. §2509.75-8
Case Law Howard v. Shay, 100 F.3d
1484 (9th Cir. 1996), cert. denied, 520 U.S. 1237, 117 S.Ct. 1838, 137 L.
Ed. 2d 1042 (1997); Katsaros v. Cody, 744 F.2d 270 (2nd Cir.),
cert. denied, 469 U.S. 1072, 105 S. Ct. 565 (1984); Donovan v. Mazzola,
716 F.2d 1226 (9th Cir. 1983), cert. denied, 464 U.S. 1040
(1984); George v. Kraft Foods Global, Inc., 641 F. 3d 786 (7th Cir. 2011);
Braden v. Wal-Mart Stores, Inc., 588 F.3d 585 (8th Cir. 2009); Ramos v. Banner
Health, 461 F.Supp. 3d 1067 (D. Colo. 2020); Huang v. TriNet HR III, Inc., No.
8:20-cv-2293, 2023 WL 3092626 (M.D. Fla.
Apr. 26, 2023); Moore v. Humana, Inc., No. 3:22-cv-93, 2024 WL
497125 (W.D. Ky. Feb. 8, 2024)
Other DOL Field Assistance
Bulletin 2007-01 (Feb. 2, 2007); DOL Information Letter, Qualified Plan
Services (July 28, 1998); DOL Information Letter,
Service Employees International Union (Feb. 19, 1998); DOL Advisory Opinion
2003-09A; U.S. Department of Labor, Employee Benefits Security Administration,
Tips for Hiring a Service Provider with Strong Cybersecurity Practices (April
2021); U.S. Department of Labor,
Employee Benefits Security Administration, Meeting Your Fiduciary
Responsibilities (September 2021)
Investment
Advisers Act of 1940 §206(1)-(2)
Case Law In the Matter of Eugene
Bilotti, Investment Advisers Act Release No. 1689 (Dec. 23, 1997); SEC v.
Greenberg, Civ. Act. No. 1:11-cv-00313-JLK (D. Co. Feb. 11, 2011); In the
Matter of Baskin Planning Consultants, Ltd., Investment Advisers Act Release
1297 (Dec. 19, 1991); In the Matter of Alfred C. Rizzo, Investment Advisers Act Release No. 897 (Jan. 11,
1984); In the Matter of Hennessee Group LLC and Charles J. Gradante, Investment
Advisers Act Release No. 2871 (Apr. 22, 2009)
Other Commission
Interpretation Regarding Standard of Conduct for Investment
Advisers, 84 Fed. Reg. 33669 (July 12, 2019)
Uniform
Prudent Investor Act [UPIA] §2(a); §2(c); §2(f); §7 and
Comments; §9(a)(1), (2) and (3)
Uniform
Prudent Management of Institutional Funds Act [UPMIFA] §3(b); §3(c); §3(e); §5(a)
Model
Management of Public Employee Retirement Systems Act [MMPERSA] §6(a); §6(b)(1) and (2); §7;
§8(a)(1)
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| 3.2 | Implement statutory or regulatory investment safe harbors in compliance with the applicable provisions. Show Detail Hide Detail Show Substantiation Hide Substantiation | Conformity |
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Detail 3.2.1 Available safe harbors are evaluated to determine if any advance the best interests of the investors and/or beneficiaries. 3.2.2 When elected, safe harbor provisions are implemented in compliance with requirements. |
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Substantiation
Employee
Retirement Income Security Act of 1974 [ERISA] §3(38); §402(c)(3);
§404(a)(1)(B); §404(c); §404(c)(5); §404(e); §405(d)(1); §408(b)(14);
§408(g)(10)-(11)
SECURE
2.0 Act of 2022 Regulations 29 C.F.R. §2550.404a-1; 29
C.F.R. §2550.404a-2; 29 C.F.R. §2550.404a-3; 29 C.F.R.
§2550.404a-4 29 C.F.R. §2550.404a-5; 29 C.F.R. §2550.404c-1; 29
C.F.R. §2550.404c-5; 29 C.F.R. §2550.408g-1 PTE
2020-02, Improving Investment Advice for Workers & Retirees (Dec. 18, 2020)
Other Interpretive Bulletin 75-8,
29 C.F.R. §2509.75-8 (FR13-15, FR17Q); Interpretive Bulletin 08-02, 29 C.F.R.
§2509.08-2; DOL Miscellaneous Document, Apr. 13, 1998 – Study of 401(k) Plan
Fees and Expenses; Interpretative Bulletin 96-1(e), 29 C.F.R. § 2509.96-1(e);
Department of Labor Field Assistance Bulletin 2007-01 (Feb. 2, 2007); DOL
Advisory Opinion Letter 97-15A (May 22, 1997); DOL Advisory Opinion Letter
97-16A (May 23, 1997); TIAA Information Letter, Dec. 22, 2016; U.S. Department
of Labor, Employee Benefits Security Administration, New Fiduciary Advice
Exemption: PTE 2020-02 Improving Investment Advice for Workers and Retirees
Frequently Asked Questions, (April 2021)
Case Law Whitfield v. Cohen, 682 F.
Supp. 188 (S.D.N.Y. 1988); DeFelice v. U.S. Airways, Inc., 497 F.3d
410 (4th Cir. 2007); Tibble v. Edison Int’l, 729 F.3d 1110 (9th Cir. 2013);
Tussey v. ABB, Inc., 746 F.3d 327 (8th Cir. 2014)
Investment
Advisers Act of 1940 §203(e)(6); §206(3)
(principal transactions)
Securities
Exchange Act of 1934 §28(e)
Regulations 17 C.F.R. §275.202(a)(25);
17 C.F.R. §275.203(3)(6); 17 C.F.R. §275.206(4)-7; 17 C.F.R.
§270.38a-1
Case Law In Re Enron Corp.
Securities, Derivative & ERISA Lit., 284 F.Supp.2d 511, 578 (S.D. Texas
2003); In the Matter of Western Asset Management Co. and Legg Mason Fund
Adviser, Inc., Investment Advisers Act Release No.1980 (Sep. 28, 2001); In the
Matter of Morgan Stanley Investment Management, Inc., Investment Advisers Act
Release No. 3315 (Nov. 16, 2011)
Other Uniform Application for
Investment Adviser Registration (Form ADV), Glossary, Item 42; Disclosure by
Investment Advisers Regarding Soft Dollar Practices, Investment Advisers Act
Release 1469 (Feb. 14, 1995); Commission
Guidance Regarding Client Commission Practices Under Section 28(e) of the
Securities Exchange Act of 1934, Investment Advisers Act Release No. 54165
(July 18, 2006)
Uniform
Prudent Investor Act [UPIA] §9(a); §9(c)
Uniform
Prudent Management of Institutional Funds Act [UPMIFA] §5(a); §5(c)
Model
Management of Public Employee Retirement Systems Act [MMPERSA] §6(a); §6(b); §6(d) |
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| 3.3 | Make and document decisions regarding investment strategies and types of investments in accordance with fiduciary obligations. Show Detail Hide Detail Show Substantiation Hide Substantiation | Conformity |
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Detail 3.3.1 A prudent due diligence process is used to select investment strategies, investment managers, and investments. 3.3.2 Decisions regarding the selection of investments consider both qualitative and quantitative criteria. 3.3.3 The due diligence process used to select investment strategies, investment managers, and investments is documented and consistently applied. 3.3.4 Regulated investments are preferred over unregulated investments when all other characteristics are comparable. 3.3.5 Investments that are covered by readily available data sources are preferred over similar investments for which limited coverage is available when all other characteristics are comparable. 3.3.6 A prudent due diligence process is used to make decisions regarding the use of proprietary versus non-proprietary products, and separately managed versus commingled accounts. |
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Substantiation
Employee
Retirement Income Security Act of 1974 [ERISA] §404(a)(1)(B); §404(a)(1)(C)
Regulations 29 C.F.R. §2550.404a-1 (and
the Preamble); 29 C.F.R. §2550.404c-1(b)(3)
Case Law Metzler v. Graham, 112 F.3d
207 (5th Cir. 1997); Marshall v. Glass/ Metal Ass’n and Glaziers and
Glassworkers Pension Plan, 507 F. Supp. 378 (D. Hawaii 1980); Smith v. Common
Spirit Health, 37 F.4th 1160 (6th Cir. 2022); Johnson v. The PNC Fin. Servs. Grp.,
Inc., Civil Action No. 2:20-cv-01493-CCW
(W.D. Pa. Mar. 31, 2022); Trauernicht v. Genworth Fin., Inc.,
Civil Action No. 3:22-cv-00532 (E.D. Va. Aug. 29, 2024)
Other H.R. Report No. 1280, 93rd
Congress, 2d Sess. (1974), reprinted in 1974 U.S. Code Cong. & Admin. News
5038 (1974); DOL Prohibited Transaction Exemption 77-4, 42 Fed. Reg. 18732
(Apr. 8, 1977); DOL Advisory Opinion 2003-09A (June 25, 2003); DOL Field Assistance
Bulletin 2007-01, A
Look at 401(k) Plan Fees, DOL (September 2019) Target
Date Retirement Funds – Tips for ERISA Plan Fiduciaries (February 2013)
Investment
Advisers Act of 1940 Other Risk
Alert: Investment Adviser Due Diligence Processes for Selecting Alternative
Investments (Jan. 28, 2014) Risk Alert: The
Division of Examinations’ Review of ESG Investing (Apr. 9, 2021)
Investment
Company Act of 1940 §35(d), and Rule 35d-1 (17
CFR §270.35d-1)
Regulations Investment
Company Names Rule (Sept. 20, 2023)
Uniform
Prudent Investor Act [UPIA] §2(a); §3; §3 Comments
Uniform
Prudent Management of Institutional Funds Act [UPMIFA] §3(e)
Management
of Public Employee Retirement Systems Act [MMPERSA]
§7(3); §8(a)(1) |
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| 4.1 | Conduct periodic reviews of investment performance against appropriate market and peer group benchmarks and overall objectives for the portfolio. Show Detail Hide Detail Show Substantiation Hide Substantiation | Conformity |
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Detail 4.1.1 Investment performance of the overall portfolio is compared against an appropriate benchmark and evaluated in the context of portfolio objectives. 4.1.2 The performance of each investment option is periodically compared against an appropriate market and peer group benchmark and any other performance-related due diligence criteria defined in the investment policy statement. 4.1.3 Underperforming investments are monitored and decisions to retain or replace investments are documented. 4.1.4 Rebalancing procedures are reasonable, documented, and consistently applied. 4.1.5 Investment performance is periodically reported to the client. |
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Substantiation
Employee
Retirement Income Security Act of 1974 [ERISA] §3(38); §402(c)(3); §404(a);
§405(c)(2)(A)(iii); §408(g)
Regulations 29 CFR §2550.404a-1
Case Law Hughes v. Northwestern
University, 595 U.S. 170 (2022); Tibble v. Edison, Int’l, 575 U.S. 523 (2015),
on remand 843 F.3d 1187 (9th Cir. 2016); Tussey v. ABB, Inc., 746 F. 3d 327
(8th Cir. 2014); Leigh v. Engle, 727 F.2d 113 (7th Cir. 1984)
Other Interpretive Bulletin 75-8,
29 C.F.R. §2509.75-8 (FR17); DOL Field Assistance Bulletin 2018-01, ftnt. 7
(Apr. 23, 2018); DOL Tips for Selecting and Monitoring Service Providers
(2005); DOL Field Assistance Bulletin 2007-01
Investment
Advisers Act of 1940 Case Law In the Matter of NPA Asset
Management, LLC, Investment Advisers Act Release No. 6110 (September 8, 2022)
Other Commission
Interpretation Regarding Standard of Conduct for Investment
Advisers, 84 Fed. Reg. 33669 (July 12, 2019) Suitability of
Investment Advice Provided by Investment Advisers, Investment Advisers Act
Release No. 1406 (Mar. 16, 1994) Study
on Investment Advisers and Broker-Dealers (SEC Staff, Jan. 21, 2011)
Uniform
Prudent Investor Act [UPIA] §2(a); §2(c); §9(a)
Uniform
Prudent Management of Institutional Funds Act [UPMIFA] §3(b); §3(e); §5(a)
Model
Management of Public Employee Retirement Systems Act [MMPERSA]
§6(a); §6(b)(1-3); §6(d); §6
Comments; §8(b) |
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| 4.2 | Conduct periodic reviews of qualitative and/or organizational changes of investment managers and other service providers. Show Detail Hide Detail Show Substantiation Hide Substantiation | Conformity |
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Detail 4.2.1 Periodic evaluations of the qualitative factors that may impact the results or reliability of Investment Managers are performed. 4.2.2 Negative news and other material information regarding an Investment Manager or other service provider are considered and acted on in a timely manner. 4.2.3 Deliberations and decisions regarding the retention or dismissal of Investment Managers and other service providers are documented. 4.2.4 Qualitative factors that may impact service providers are considered in the contract review process. |
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Substantiation
Employee
Retirement Income Security Act of 1974 [ERISA] §3(38); §402(c)(3);
§404(a)(1)(A)(ii) and (B); §405(d)(1); §408(b)(2)
Regulations 29 C.F.R. §2550.404a-1; 29
C.F.R. §2550.408b-2(d); 29 C.F.R. §2550.408c-2
Cases Fink v. National Savings and
Trust Co., 772 F.2d 951 (D.C. Cir. 1985); Liss v. Smith, 991 F. Supp. 278
(S.D.N.Y. 1998); Tussey v. ABB, 746 F.3d 327 (8th Cir. 2014)
Other Interpretive Bulletin 75-8,
29 C.F.R. §2509.75-8 (FR17); Booklet: A Look at 401(k) Plan Fees, U.S. Department of Labor, Pension
and Welfare Benefits Administration; DOL Interpretive Bulletin 96-1; DOL Field
Assistance Bulletin 2007-01
Investment
Advisers Act of 1940 Regulations 17 C.F.R. §275.206(4)-7
Case Law In the Matter of Horter
Investment Management, LLC, Investment Advisers Act Release No. 4823 (December
8, 2017); In the Matter of First Allied Advisory Services, Inc., and Cetera
Investment Advisers LLC, Investment Advisers Act Release No. 6734 (Sept. 27,
2024)
Other Compliance Programs of
Investment Companies and Investment Advisers, Investment Advisers Act Release
No. 2204 (Dec. 18, 2003) Regulation
of Investment Advisers, SEC Division of Investment Management
(March 2013), Discussion of material disclosure, p. 23
Uniform
Prudent Investor Act [UPIA] §2(a); §7; §9(a)
Uniform
Prudent Management of Institutional Funds Act [UPMIFA] §3(b); §3(c); §5(a)
Model
Management of Public Employee Retirement Systems Act [MMPERSA] §6(a) and (b)(13); §7(5) |
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| 4.3 | Conduct periodic reviews of policies for trading practices and proxy voting. Show Detail Hide Detail Show Substantiation Hide Substantiation | Conformity |
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Detail 4.3.1 Procedures are in place to periodically review each investment manager’s policies for best execution. |
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Substantiation
Employee
Retirement Income Security Act of 1974 [ERISA] §3(38); §402(c)(3);
§403(a)(1) and (2); §404(a)(1)(A) and (B)
Regulation §2550.404a-1
Case Law Herman v. NationsBank Trust
Co., (Georgia), 126 F.3d 1354, 21 E.B.C. 2061 (11th Cir. 1997), reh’g denied,
135 F.3d 1409 (11th Cir.), cert. denied, 525 U.S. 816, 19
S.Ct. 54, 142 L.Ed.2d 42 (1998); Spence v. American Airlines, Inc., No.
4:23-cv-00552-0 (N.D. Tex. Jan. 10, 2025)
Other Interpretive Bulletin 75-8,
29 C.F.R. §2509.75-8 (FR17Q); Interpretive Bulletin 08-2, 29 C.F.R. §2509.08-2; Prohibited
Transaction Exemption 86-128; DOL Information Letter, Prescott Asset Management
(Jan. 17, 1992) (fn. 1); DOL Information Letter, Refco, Inc. (Feb. 13, 1989);
ERISA Technical Release 86-1 (May 22, 1986); Prohibited Transaction Exemption 2020-02
Investment
Advisers Act of 1940 §206(4); Securities Exchange
Act of 1934
Regulation 17 C.F.R. §275.206(4)-6; 17
C.F.R. §275.206(4)-7
Case Law In re Arleen W. Hughes, Act
Release No. 4073, (Feb. 20, 1948); In the Matter of Focus Point Solutions,
Inc., Advisers Act Release No. 30196 (Sept. 6, 2012); In the Matter of KMS Fin.
Servs., Inc., Advisers Act Release No. 4730 (July 19, 2017)
Other Commission
Guidance Regarding Proxy Voting Responsibilities of Investment
Advisers (Sept. 10, 2019) Supplement
to Commission Guidance Regarding Proxy Voting Responsibilities
of Investment Advisers (Sept. 3, 2020) Investment
Advisers, Fiduciary Duties, and Voting Obligations: Harvard
Law School Forum on Corporate Governance (Sept. 23, 2019) NASAA
Model Rule for Investment Adviser Written Policies and Procedures
Under the Uniform Securities Acts of 1956 and 2002
(Adopted Nov. 24, 2020) Securities Exchange Act
Release No. 23170 (Apr. 23, 1986); Investment Advisers Act Release No. 232
(Oct. 16, 1968); SMC Capital, Inc. SEC No-Action Letter (Sept. 5, 1995);
Charles Lerner, Esq., SEC No-Action Letter (July 25, 1990); SMC Capital, Inc.
No-Action Letter (Sept. 5, 1995); Pretzel & Stouffer No-Action Letter (Dec. 1, 1995); Investment
Advisers Act Release No. 2106 (Jan. 31, 2003); Investment Company
Act Release No. 25922 (Jan. 31, 2003); Salomon Bros., SEC No-Action Letter (May
23, 1972); Risk
Alert: Most
Frequent Best Execution Issues Cited in Adviser Exams
Securities
and Exchange Act of 1934 §28(e)
Regulation Disclosure
of Order Handling Information, SEC (Apr. 24, 2019)
Case Law In the Matter of Robinhood
Financial, LLC, Securities Exchange Act Release No. 90694 (Dec. 17, 2020)
Other Broker-Dealers
and Payment for Order Flow, Congressional Research Service (Apr.
2, 2021) Policy
Brief: Payment for Order Flow, CFA Institute (July 2016)
Uniform
Prudent Investor Act [UPIA] §2(a) and (d); §7; §9(a)
Uniform
Prudent Management of Institutional Funds Act [UPMIFA] §3(b), (c), and (e)(5);
§5(a)
Model
Management of Public Employee Retirement Systems Act [MMPERSA]
§6(2) and (3); § 7(2), (3),
and (5); §8(a)(3) |
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| 4.4 | Conduct periodic reviews to ensure that investment-related fees, compensation, and expenses are fair and reasonable for the services provided. Show Detail Hide Detail Show Substantiation Hide Substantiation | Conformity |
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Detail 4.4.1 A summary of all parties being compensated from client portfolios or from plan or trust assets and the amount of compensation has been documented. 4.4.2 Fees, compensation, and expenses paid from client portfolios or from plan or trust assets are periodically reviewed to ensure consistency with all applicable laws, regulations, policies and procedures and service agreements. 4.4.3 Procedures are in place to avoid or identify and appropriately address unreasonable fees. |
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Substantiation
Employee
Retirement Income Security Act of 1974 [ERISA] §3(14)(B); §404(a)(1)(A) and
(B) and (D); §406(a) and (b); §408(b)(2)
Regulations 29 C.F.R. §2550.404a-1; 29
C.F.R. §2550.408(b)(2)
Case Law Brock v. Robbins, 830 F.2d
640 (7th Cir. 1987); Coppel v. SeaWorld Parks & Entertainment, Inc., 2024
WL 1231234 (S.D. Cal. 2024); Perkins v. United Surgical Partners International,
Inc., 78 F.4th 637 (5th Cir. 2024)
Other Booklet: A Look at 401(k)
Plan Fees, U.S. Department of Labor, Pension and Welfare Benefits
Administration; DOL Advisory Opinion Letter 2001-01A; DOL Advisory Opinion
Letter 89-28A; Interpretive Bulletin 75-8, 29 C.F.R. §2509.75-8 (FR17Q); DOL
Advisory Opinion 97-15A (May 22, 1997); DOL Advisory Opinion 97-16A (May 22,
1997); DOL Interpretive Bulletin 2007-01; DOL Prohibited Transaction Exemption
2020-02
Investment
Advisers Act of 1940 §205(a)(1), Section 206(1)
and Section 206(2)
Regulations 17 C.F.R. §275.205-3; 17
C.F.R. § 275.206(4)-3 Investment
Adviser Marketing Rule (Dec. 22, 2020)
Case Law SEC v. Capital Gains
Research Bureau, Inc., 375 U.S. 180 (1963); In the Matter of Barclays Capital
Inc., Investment Advisers Act Release No. 4705 (May 10, 2017); In the
Matter of Morgan Stanley Smith Barney, LLC, Investment Advisers Act Release No.
4607 (Jan. 13, 2017); In the Matter of Capital Dynamics, Inc., Investment
Advisers Act Release No. 4746 (Aug. 16, 2017); In the Matter of Pruco Securities,
LLC, Investment Advisers Act Release No. 5657 (Dec. 23, 2020); In the Matter of
Waddell & Reed, LLC, Investment Advisers Act Release No. 6136 (Sept. 19,
2022)
Other News Release: SEC
Adopts Modernized Marketing Rule for Investment Advisers
(Dec. 22, 2020) News Release: SEC Charges
Investment Adviser for Failing to Conduct Adequate Follow-up
After Client Accounts Were Flagged for Potential Reverse Churning
(Sept. 19, 2022) SEC
Investor Bulletin: Subscription-based Advisory Fees
(Sept. 6, 2023) SEC
Enforcement Division, Observations from Examinations of Investment
Advisers Managing Client Accounts That Participate In Wrap
Fee Programs (July 21, 2021) BISYS Fund Services, Inc.,
SEC No-Action Letter (Sept. 2, 1999); SEC Investment Adviser Examination Manual
(1980); Compliance Programs of Investment Companies and Investment Advisers,
Investment Advisers Act Release No. 2017 (Feb. 5, 2003); Don P. Matheson &
Co.¸ SEC No-Action Letter (May 15, 1976); Risk
Alert: Overview
of Most Frequent Advisory Fee and Expense Compliance Issues
Identified in Examinations of Investment Advisers
(April 12, 2018)
Other NASAA
Unethical Business Practices of Investment Advisers, Investment
Adviser Representatives, and Federal Covered Advisers,
Model Rule 102(a)(4)-1 (Adopted April 27, 1997, amended April 18, 2004, and
Sept. 11, 2005) NASAA
Investment Adviser Representative Definition, Model Rule USA 2002
102(16), (Adopted Sept. 17, 2008) NASSA
Investment Adviser Section Guidance: Set Labels Aside: Investment
Advisory Fees Must Be Reasonable (Nov. 18, 2022)
Uniform
Prudent Investor Act [UPIA] §2(a); §7 and Comments; §9,
Comments
Case Law Matter of Derek W. Bryant,
188 Misc. 2d 462, 729 NYS 2d 309 (June 21, 2001)
Other McKinneys EPTL112.3(d)
Uniform
Prudent Management of Institutional Funds Act [UPMIFA] §3(a), (b), and (c); §5(a)
and (c)(1)
Model
Management of Public Employee Retirement Systems Act [MMPERSA]
§6(b)(2) and (3); §7(2) and
(5); §7, Comments |
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| 4.5 | Conduct periodic reviews of the organization’s effectiveness in meeting its fiduciary responsibilities. Show Detail Hide Detail Show Substantiation Hide Substantiation | Conformity |
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Detail 4.5.1 Fiduciary assessments are conducted at planned intervals to determine whether appropriate policies and procedures are in place to address all fiduciary obligations and that such policies and procedures are effectively implemented and maintained. 4.5.2 The investment policy statement is reviewed at least annually to ensure it is aligned with current facts and circumstances. |
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Substantiation
Employee
Retirement Income Security Act of 1974 [ERISA] §404(a)(1)(B)
Case Law Fink v. National Savings
& Trust Co., 772 F.2d 951, 957 (D.C. Cir. 1985); Liss v. Smith, 991 F.
Supp. 278, 299300 (S.D.N.Y., 1998); Harley v. Minnesota Mining
and Manufacturing Company, 42 F. Supp. 2d 898, 906 (D. Minn. 1999); In re Enron
Corp. Securities, Derivative & ERISA Litigation, 284 F. Supp. 2d 511 (S.D.
Tex. 2003); Spence v. American Airlines, Inc., No. 4:23-cv-00552-0 (N.D. Tex.
Jan. 10, 2025)
Other DOL Advisory Opinion
1992-24A; DOL Advisory Opinion 2002-06A; DOL Employee Benefits Security
Administration, Meeting Your Fiduciary Responsibilities (May 2004); 29 C.F.R.
2509.75-8; 29 C.F.R. 2509.08-2; 17 C.F.R. §
275.206(4)7; DOL Field Assistance Bulletin 2007-01
Investment
Advisers Act of 1940 Regulation 17 C.F.R. §275.206(4)-7
Case Law In the Matter of Trust &
Investment Advisors, Inc., Larry K. Pitts, and George M. Prugh, Investment
Advisers Act Release No. 4087 (May 18, 2015); In the Matter of Institutional
Investor Advisers, Inc., Investment Advisers Act Release No. 4824 (Dec. 8,
2017); In the Matter of OEP Capital Advisors, L.P., Investment Advisers Act
Release No. 6514 (Dec. 26, 2023)
Uniform
Prudent Investor Act [UPIA] §2(a); §2(d)
Uniform
Prudent Management of Institutional Funds Act [UPMIFA] §3(b) and (c)
Model
Management of Public Employee Retirement Systems Act [MMPERSA] §8(b); §7
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SECTION 4 - ASSESSMENT CONCLUSIONS AND RECOMMENDATION
Based on the findings obtained during the Assessment, the Company is in substantial conformity to the Standard, and is recommended for CEFEX registration.
This assessment has been reviewed by the CEFEX Registration Committee to maintain impartiality and consistency in the registration process. For details on the complete assessment process, please visit www.fi360.com/cefex.
Note to Report
The information contained in this report is a summary of an assessment conducted by CEFEX, Centre for Fiduciary Excellence and is valid for 1 year from the Date of Registration shown. The report is suitable for public distribution at the discretion of the certified firm. For any questions related to this report, please contact CEFEX at cefexadmin@broadridge.com.
CEFEX, Centre for Fiduciary Excellence is an independent certification organization, and is part of Broadridge Retirement and Workplace. CEFEX works closely with industry experts to provide comprehensive assessment programs to improve the fiduciary practices of investment stewards, advisors, recordkeepers, administrators and managers.
Broadridge Retirement and Workplace offers fiduciary education, training and technology solutions, and helps financial intermediaries use prudent fiduciary practices to profitably gather, grow and protect investors’ assets. Since 1999, the firm has provided financial professionals with the tools necessary to act as a fiduciary in their work with investors. Broadridge Retirement and Workplace is also the home of the Accredited Investment Fiduciary® (AIF®) designation, the Fiduciary Focus Toolkit™ and the Fi360 Fiduciary Score®.
