Each year, our AIF and AIFA designees are required to renew their designation by completing continuing education requirements, attesting to the Code of Ethics, and paying their designation dues. Often times, they have questions about the process that are addressed via email or over the phone by our staff. One such exchange turned into a prolonged dialogue via email and eventually a conference call to discuss our differences of opinion. Ultimately, the designee renewed his designation, although it was not a given that would be the end result.
The primary point of contention was the first bullet in our designee Code of Ethics, which reads:
"I will employ and provide the client information on the Prudent Practices when serving as an investment fiduciary and/or advising other investment fiduciaries."
The designee did not feel comfortable attesting to this statement because he did not provide information on the Practices to all of his clients and, for various reasons, did not intend to do so; at least not in the short term.
We often refer to our Prudent Practices (Practices) as a checklist that defines a fiduciary standard of care. With the exception of CEFEX-certified firms, we are not aware of any firm that is aligned with all of them. We explained to this designee that although we deemed the Code of Ethics very important and expected that it would be followed, we did not expect perfection. We described how the Practices are based on ISO 9000, which defines a quality management system that is based on continuous improvement. We explained how we routinely tell departing students that their new found fiduciary knowledge should be disseminated in bite size pieces so as not to overwhelm their co-workers, peers, or clients. Improvements or changes to the investment management process should be made systematically over time so as not to be too disruptive to the ongoing operations.
If this designee was ignoring the Practices, that was a problem. But if it was simply that it would take some time before he could be completely aligned with the Practices for all of his clients, we did not see why he could not attest to the Code at stated above. He eventually agreed, attested to the Code of Ethics, and renewed his designation.
Admittedly, at times we felt that this designee was being a real pain; splitting hairs. We joked with him that as an attorney, isn't being a pain a large part of what he is trained to do. But upon reflection, we couldn't help but be impressed and will consider some of suggestions upon our next review of our Code. Most all professional designations have a Code of Ethics and all of them have a percentage of designees that do not take the Code seriously or, worse, intentionally violate it. Many could not tell you what it says. It's those type of designees that keep us awake at night. If only all were this deliberate before they attested to the fact that they would comply.
Do you read and fully intend to abide by what you sign?
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