When serving individual investors, CEFEX-certified Investment Advisory firms adhere to a fiduciary standard which can be summarized using 3 principles*, as follows:
Duty: CEFEX-certified Investment Advisory firms adhere to the highest level of duty and loyalty to clients - they always put client interests ahead of their own.
The advisors in the firm meet the highest legal standard of professional conduct. Where conflicts of interest exist, the firm must inform the client in clear, limited and complete language. The firm must eliminate conflicts of interest created by compensation.
Safeguard: CEFEX-certified Investment Advisory firms keep client assets safe from fraud and keep client information private and safe from unauthorized access.
The firm uses established third parties to hold and account for client assets. The firm maintains SEC registration and appropriate levels of liability insurance. The firm documents and follows stringent privacy and employee conduct policies including employee background checks.
Professionalism: CEFEX-certified Investment Advisory firms operate their businesses at the highest level of professionalism in the industry.
The firm demonstrates robust, industry-leading business operations. The firm manages investments objectively and demonstrates a culture of compliance. The firm's advisors maintain appropriate credentials, experience, accreditation and ongoing education.
*These principles were written by Steve Lockshin and Charles Goldman, co-founders of Advizent, an initiative which was intended to promote advisors who upheld a fiduciary standard. The initiative did not launch into a commercial service, however the principles remain sound and are effectively a reduced representation of the CEFEX Standard.