1 Self-assessment of fiduciary excellence for investment stewards safe Defining a Global Fiduciary Standard of Excellence For persons who have the legal responsibility for overseeing someone else's money, including trustees and investment committee members. level 1 Assessment Edition self-assessment of fiduciary excellence for investment stewards This Self-Assessment of Fiduciary Excellence (SAFE) is provided to assist investment stewards in analyzing how well their portfolio meets the Global Standard of Fiduciary Excellence defined by the Center for Fiduciary Studies. Each question corresponds to a Practice from the Prudent Practices for investment stewards handbook. Responding yes to a question indicates that the fiduciary requirement or best practice that it is based upon is being fulfilled.
2 Answering no or I don't know to any question indicates that a potential breach, omission, or shortfall is occurring within the investment decision-making process and should trigger an inquiry into the circumstances to determine if any action is required. The SAFE is a Level 1 Assessment that any Steward can use to quickly assess their safe understanding of, and compliance to, a fiduciary standard of care. A Level 2 Assessment, known as a Consultant's Review of Fiduciary Practices (CRFP), provides a more detailed analysis of the investment Steward's practices. A Level 3 Assessment, known as a CEFEX Assessment of Fiduciary Excellence (CAFE), is an independent verification of an investment Steward's conformity to all Practices and Criteria that comprise the Global Standard of Fiduciary Excellence.
3 A successful Level 3 Assessment results in formal recognition, or Certification, . from CEFEX and implies that a fiduciary can demonstrate adherence to the industry's best practices, and is positioned to earn the public's trust. F i du c ia ry as se s s m e n t s a l s o a r e ava i l a b l e f or I n v e s t m e n t A dv i s or s , I n v e s t m e n t M a nag e r s , I n v e s t m e n t Su p p ort Se rv ic e s , R e c or d K e e p e r s a n d T h i r d Pa rt y A dm i n i s t r ator s , a n d f or A r r a n g e m e n t Au di t s a s r e qu i r e d b y t h e 2 0 0 6 P e n sion P rot e c t ion Ac t. For more information on the Global Standard of Fiduciary Excellence, please visit For more information on fiduciary assessments, please visit T h e n um b e r r e f e r e n c e d a f t e r e ac h q u e s t ion r e p r e se n t s t h e c or r e sp on di n g P r ac t ic e i n t h e prudent practices for investment stewards handbook 1 Does the investment Steward demonstrate bo When socially responsible investment strategies an awareness of fiduciary duties and are elected, are the strategies structured responsibilities?
4 ( ) appropriately? ( ). 2 Are investments and investment services under bp Is a reasonable due diligence process followed the oversight of the investment Steward consistent to select each service provider in a manner with applicable governing documents? ( ) consistent with obligations of care? ( ). 3 Are the roles and responsibilities of all involved bq When statutory or regulatory investment safe parties (fiduciaries and non-fiduciaries) defined harbors are elected, is each investment strategy and documented? ( ) implemented in compliance with regulatory requirements, when elected? ( ). 4 Does the investment Steward identify conflicts of interest and address conflicts in a manner br Are decisions regarding investment strategies consistent with the duty of loyalty?
5 ( ) and types of investments documented and made in accordance with fiduciary obligations 5 Does the investment Steward require agreements of care? ( ). with service providers to be in writing and consistent with fiduciary standards of care? ( ) bs Are periodic reports used to compare investment performance against appropriate index, peer group, 6 Are portfolio assets protected from theft and and investment policy statement objectives? ( ). embezzlement? ( ). 7 Has an investment time horizon been bt Are periodic reviews made of qualitative and/or organizational changes of investment identified for each investment objective Advisors, investment Managers, and other of the portfolio? ( ). service providers? ( ). 8 Has an appropriate risk level been identified for the portfolio?
6 ( ). bu Are control procedures in place to periodically review policies for trading practices and proxy 9 Has an expected return to meet each investment voting? ( ). objective for the portfolio been identified? ( ). cl Are periodic reviews conducted to ensure that bl Are selected asset classes consistent with the investment -related fees, compensation, and portfolio's time horizon and risk and return expenses are fair and reasonable for the services objectives? ( ) provided? ( ). bm Are selected asset classes consistent with cm Is there a process to periodically review the implementation and monitoring constraints? ( ) Steward's effectiveness in meeting its fiduciary bn Does the investment policy statement contain responsibilities?
7 ( ). sufficient detail to define, implement, and monitor the portfolio's investment strategy? ( ). periodic table of global fiduciary practices for investment stewards safe level 1 Assessment PRACTICE PRACTICE PRACTICE The investment Steward An investment time horizon An appropriate risk level has demonstrates an awareness has been identified for each been identified for the portfolio. of fiduciary duties and investment portfolio. responsibilities. PRACTICE PRACTICE PRACTICE PRACTICE Investments and investment The roles and responsibilities of An expected return to meet each Selected asset classes are services under the oversight all involved parties (fiduciaries investment objective for the consistent with the portfolio's of the investment Steward and non-fiduciaries) are defined portfolio has been identified.
8 Time horizon and risk and are consistent with applicable and documented. return objectives. governing documents. PRACTICE PRACTICE PRACTICE PRACTICE The investment Steward identifies The investment Steward requires Selected asset classes are The investment policy conflicts of interest and addresses agreements with service providers consistent with implementation statement contains sufficient conflicts in a manner consistent to be in writing and consistent and monitoring constraints. detail to define, implement, with the duty of loyalty. with fiduciary standards of care. and monitor the portfolio's investment strategy. PRACTICE FO PRACTICE 1 2. E R. IZ M. Portfolio assets are protected N When socially responsible A. A. from theft and embezzlement.
9 investment strategies are LI. G. elected, the strategies are OR. ZE. structured appropriately. PRACTICE PRACTICE 4 3. T. Periodic reports are used to A reasonable due diligence process EN. M. compare investment performance is followed to select each service O. IT. M. against appropriate index, peer provider in a manner consistent N. E. group, and investment policy O. R PL with obligations of care. statement objectives. IM. PRACTICE PRACTICE PRACTICE PRACTICE Periodic reviews are made of Control procedures are in place to When statutory or regulatory Decisions regarding investment qualitative and/or organizational periodically review policies for investment safe harbors are strategies and types of changes of investment Advisors, trading practices and proxy voting.
10 Elected, each investment strategy investments are documented investment Managers, and other is implemented in compliance and made in accordance with service providers. with the applicable provisions. fiduciary obligations of care. PRACTICE PRACTICE Periodic reviews are conducted to There is a process to ensure that investment -related periodically review the Steward's fees, compensation, and expenses effectiveness in meeting its are fair and reasonable for the fiduciary responsibilities. services provided. n ot e s safe level 1 Assessment s copyright 2013 Fi360 , Inc. RRD8M04_13.