Adherence to a FiDuciary Standard
CEFEX advisory firms adhere to the Global Fiduciary Standard of Excellence. This means they act in the best interest of investors. This is contrasted with a firm that lacks a fiduciary process or operates according to a ‘suitability’ standard.
Investors must be careful because some ‘advisors’ are commissioned salespeople who place their needs and those of their firm ahead of their clients, yet behind a ‘fiduciary veil’.
Here’s one way to look at it:
Fiduciary standard: Firm must put client’s interests above its own, and act in the client’s best interest
Vs.
Suitability standard: Firm must have a reasonable basis to believe that a recommended investment is suitable given the client’s objectives.
Many jurisdictions around the world have struggled with how to implement a universal standard for all those who give investment advice. This struggle will continue for many years, due to very strong competing interests.
CEFEX sees it this way:
Adherence to the fiduciary standard can be the foundation for the trust placed in Advisors by their clients, whether individual or institutional investors.
The fiduciary standard offers a consistency of interpretation and implementation, which facilitates the transfer of knowledge between the Advisor, clients, vendors and regulators.
