The members of the Board of any organization are fiduciaries of the organization’s assets and investments. As such they may have personal liability for acts or omissions of fiduciary standards. This liability is generally not covered by director’s insurance.
Other officers and employees may be held to be fiduciaries.
Using a Registered Investment Advisor that accepts co-fiduciary status in writing provides an element of “Safe Harbor”. Investor Solutions, Inc. will accept co-fiduciary status for your investment assets, and will assist the designated board in its fiduciary compliance.
Fiduciary compliance is a question of prudence, loyalty and following required procedures. The best defense against fiduciary problems is to establish and maintain prudent procedures and document their compliance.
It is not a guarantee of any specific investment outcome. However, liability may attach itself to the failure to follow prudent standards.
While fiduciary compliance is absolutely required by law, it need not be burdensome for the board or investment committee. They must, however, take their duties seriously.
As a step towards establishing fiduciary standards, fiduciaries should be identified, appointed in writing, accept their appointment in writing, understand their duties and organize themselves.
The board of directors may appoint an investment committee and delegate those functions to them.
To get the ball rolling, we have prepared several documents that you can adopt.
Investor Solutions will supply much of the documentation that the board or investment committee needs to support a record of ongoing compliance.
We suggest a quarterly review via teleconference with the board or investment committee. Investor Solutions will supply performance, cost, appropriate benchmarks and other information about the plan’s operation in advance. The board or investment committee should review that information and prepare any questions or concerns on that or any other issue that they might have prior to the review. These questions and Investor Solutions responses along with any follow up actions should be documented and filed away as part of the record of continuing compliance.
Finally, a copy of the Self Assessment of Fiduciary Excellence (SAFE) is attached. When the board is satisfied that they have appropriate answers for all of the questions, they can feel comfortable with their compliance and procedures. That is our common goal for your organization.