Corporate & Securities Law

The Financial Planning Association (FPA) has published a handbook containing practice guidelines for "Fiduciary Advisers" as that term is defined in the Pension Protection Act of 2006.  The FPA states that the handbook "represents a standard of excellence for fiduciary advisers."  As such, it is a must-read for anyone providing investment advice to pension plan participants or beneficiaries with respect to plan assets for fees or other compensation, including those fiduciary advisers employed by trust departments, insurance companies, brokerage firms, registered investment advisers and any agents or affiliates. 

The handbook defines "prudent, or best, practices", and it is organized under a four-step investment management process.  The four steps are:  (1) Organize; (2) Formalize; (3) Implement; and (4) Monitor.  Each practice falls within one of those four steps.  For each practice, there are "criteria" that define the scope or detail of each practice.  Sometimes, a "suggested procedure" is provided to demonstrate how a particular practice should be implemented.

Let's examine the more important practices, criteria and suggested procedures under the four-step investment management process.

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