Cefex - Benefits

Increased Assets Under Management / Advisement

Certification increases market differentiation and investor (individual or institutional) confidence. With the recent increase in investor anxiety due to scandals, bankruptcies, and lawsuits and the increased press from the introduction of the PPA, fiduciaries can differentiate themselves by assuring investors of their excellent practices.

See quotes from CEFEX-certified firms.

In addition, the following benefits are specific to investment fiduciaries:

Investment Stewards
The benefits of applying the Fiduciary Practices are:

Help to establish evidence that the fiduciary is following a prudent investment process.

Potentially help increase long-term investment performance by identifying appropriate procedures for:

Diversifying the portfolio across multiple asset classes and peer groups
Evaluating investment management fees and expenses
Selecting Investment Managers
Terminating Investment Managers that no longer are appropriate

Help uncover investment and/or procedural risks not previously identified, which may assist in prioritizing investment management projects.

Encourage fiduciaries to compare their practices and procedures with those of their peers.

Assist in establishing benchmarks to measure the progress of the investment fiduciary.

For Investment Advisors
The benefits of applying the Fiduciary Practices are:

Risk Management: Most investment litigation involves the omission of certain fiduciary practices and/or prudent investment procedures, as opposed to the commission of certain acts.

Competitive Advantage: 'Fiduciary responsibility' has become a watchword with trustees, investment committee members, and even retail investors. Investment Advisors who can communicate clearly how they manage investment decisions to a defined fiduciary standard, will enjoy a major advantage over competitors.

Distinction as a Fiduciary Specialist: Investment Advisors who desire to be at the top of their profession must be able to demonstrate fiduciary skills, knowledge, and responsibility in order to attract and retain key clients.

For Investment Managers
The CEFEX Detailed Fiduciary Assessments are paid for by the Investment Manager looking to improve fiduciary risk control and monitoring, reassure investors, and differentiate his services. The Investment Manager can also save money from reduced audits by institutional investors. Pension and Mutual Funds receive detailed, independent and consistent assessments. This simplifies the request for proposal (RFP) process and allows institutional investors to put more focus on talent, rather than fiduciary risk. Ultimately, this lowers the cost of monitoring and selection of investment managers.

Quotes from CEFEX-certified firms.

“The Ingham Group uses our CEFEX certification to articulate our fundamental belief in total disclosure and best fiduciary practices. We go out of our way to educate our clients and prospects on the importance of sound fiduciary practices. We believe this certification should be a standard requirement in the selection of Investment Advisors, much like how SAS70 has become required in the recordkeeping industry. CEFEX certification has been instrumental to Ingham Group maintaining its client base and opening many new opportunities. Ingham group has experienced a 30% growth in AUM in the past year, thanks to our positioning, and proven track record.”
Ken Ingham, AIFA, President and CEO, Ingham Group, Miami, FL

“Our CEFEX Certification is proudly used throughout our sales and marketing materials including brochures, presentations and our web-site. InterServ actively promotes our adherence to the Prudent Practices for Investment Advisors. Recently we won a $28 Million case over an incumbent RIA and 2 additional competitors. Our new client described one of the primary reasons for our selection was our CEFEX certification and our independence. In this day and age, technological superiority is not enough. A certification to the fiduciary best practices, using the ISO audit process, will undoubtedly carry increasing weight with many decision-makers.”
Henry Schwarzberg JD, AIF, Chief Investment Officer, InterServ, LLC, Mobile AL

“Slavic Mutual Funds Management Corporation has won many RFQ’s recently, and we can attribute our success to be due in part to our CEFEX certification. Since Slavic operates as a broker/dealer, an investment manager, a TPA and an advisor, we also believe the CEFEX process has helped improve the accountabilities within our organization. The better delineations between our disciplines has helped sustain improved corporate performance.”
John Slavic, President, Slavic Mutual Funds Management Corporation, Boca Raton, FL

“Unified Trust Company, NA became CEFEX registered in October 2006. Unified sought registration as an important independent assessment of our commitment to follow a prudent, consistent and standardized process based on Fiduciary Best Practices for Investment Advisors as promulgated by CEFEX. This independent verification means our clients, and those considering our services, can be confident that critical components of an investment strategy have been properly implemented. This can be especially important for retirement plan sponsors in today’s environment of increasing complaints and/or lawsuits alleging fiduciary misconduct. Being able to show adherence to this independent standard has given Unified a distinct advantage when competing with other investment advisors. Successful retirement outcome is the cornerstone of Unified’s philosophy. As a fully discretionary trustee, we believe a prudent best practices approach improves investment outcomes for our clients and increases their financial goal success probability. Progress towards success can and should be measured. We have done extensive research on success probabilities and have been able to show that implementing the prudent best practices necessary for CEFEX registration improves the probability of success. Unified believes registration is more than a differentiator in the sales process; rather it will make a true positive difference in the most important consideration, successful outcome. In the five months since Unified became CEFEX registered, assets under management have grown by 12.5%. In that same period, the S&P has added just over 5%. While the difference is likely due to many factors, we feel that our outcomes based approach based on prudent best practices is the overarching reason. The CEFEX registration is the distinctive sign to the marketplace that Unified Trust Co., N.A. unquestionably follows the highest fiduciary best practices standards.”
Dr. Gregory Kasten, MD, MBA, CFP, CPC, AIFA, CEO Unified Trust Company, NA.

“Thornburg Investment Management has always taken its fiduciary responsibility very seriously. In fact, the firm was founded in 1982 with a basic business tenet to “Do The Right Thing” for our advisors and their clients. In the ensuing years, we embraced our fiduciary role and have developed a fiduciary education process for our advisors and their clients. We have published three books on fiduciary related topics, provided Accredited Investment Fiduciary (AIF) education to over 400 advisors here in Santa Fe and have presented on a wide variety of fiduciary topics at over 800 seminars and conferences across the country. When the CEFEX independent fiduciary oversight process was first proposed, we embraced the review as a way to demonstrate to our advisors and their clients that we “eat our own cooking” relative to the fiduciary practices we preach. The CEFEX review also provides our advisors the comfort of knowing that Thornburg is a prudent choice as an investment manager for their client’s portfolios. The CEFEX certification has been duly noted by our advisors and extremely well received by the entire investment community.”
Jack Gardner, AIFA, Managing Director, Thornburg Investment Management, Santa Fe, New Mexico.

“ The CEFEX Analyst’s assessment of our firm’s custodian function was thorough and produced many useful benefits to us. We have a much better appreciation of our clients’ perspectives of us. The CEFEX experience has caused us to alter the way we tell our firm’s service delivery message. Our CEFEX certification has won more business for us than we even hoped.”
Denys Pearce, Managing Director, Plan B Trustees Limited, Perth Australia.