Founded in 2006, CEFEX is the Center for Fiduciary Excellence. They provide an independent third party verification of a financial advisory firm’s practice, policies and procedures. Their primary function is to validate the firm is acting as a true fiduciary—at the highest level—in every way possible.
Many financial advisors say they’re a fiduciary, but very few will put that in writing. Fewer still will spend the extensive amount of time and money to actually have it verified from an independent third party auditor.
We believe our CEFEX certification is critical to delivering the absolute best in retirement, financial, and investment planning for all of our private wealth management and 401k plan clients.
The CEFEX certification helps ensure well-defined and documented processes are in place. These structured processes are more likely to result in investment portfolios that:
Make fewer strategic mistakes
Well-defined policies virtually eliminate deficiencies in portfolio management. The decision rules would not allow it!
Far too many plan advisors operate like black boxes. They cannot (or will not) describe their investment process, thereby avoiding accountability to the investor. The prudent process has nothing to hide.
Independent fiduciary assessments supplement our internal compliance practices and mandatory statutory regulatory compliance. The rules associated with statutory compliance are designed to constrain bad conduct, but it is impossible to set rules for every situation. Independent fiduciary assessments focus oversight on process, so virtually all situations are covered.
As a CEFEX certifed advisor we strive to earn your 401k plan business on fiduciary principles, not insurance or investment product sales. This helps us stand out from other plan advisors in a crowded marketplace!
The CEFEX certification process essentially validates a financial advisor’s current practices, policies and procedures. If firm standards aren’t up to par, the certification process issues opportunities for improvement. Only after a CEFEX certification board has reviewed all of the facts and findings do they grant the actual certification to an applicant.
Reviews risk assessment
Reviews how asset allocation is based on capital market inputs and risk assumptions used by the advisor. How does the advisor firm manage risk and return characteristics of the portfolio?
Samples client files
Verifies that client files contain the service agreement deliverables, records, and outputs of the investment management process for the specific client.
Is complementary to regulatory exams
The CEFEX process-based assessment takes a different approach from the regulator’s rules-based approach. A background check including regulatory, legal and bankruptcy history is also conducted.