Prudent Practices for Investment Advisors ("the Handbook") identifies practices that prescribe a timeless and flexible process for successful investment management decision-making.
Written by the Foundation for Fiduciary Studies and edited by the American Institute of Certified Public Accountants, the Handbook is designed to assist fiduciaries who have the legal responsibility for managing someone else’s money. The AICPA's participation in the Handbook is intended to promote and protect the public interest and to perpetuate the delivery of competent and objective investment advice.
Types of fiduciaries that will benefit from the Handbook include: investment committees of retirement plans, foundations and endowments; investment advisors; consultants; private bankers; money managers; attorneys; financial planners; trustees of private trusts; and other professionals involved in investment decision-making. The Foundation for Fiduciary Studies estimates that more than five million investment fiduciaries in the U.S. oversee trillions of dollars in assets.
The Handbook includes 27 practices culled from federal and state legislation, regulatory opinion letters, and relevant case law. It is intended as a reference guide targeted at knowledgeable investment decision-makers such as CPA financial planners as well as CPAs in business and industry as trustees and/or members of investment committees.
Although the fiduciary practices address many legal requirements faced by investment fiduciaries, the Handbook focuses primarily on the Employee Retirement Income Securities Act (ERISA), the Uniform Prudent Investor Act (UPIA), and the Uniform Management of Public Employee Retirement Systems Act (MPERS).
Investment fiduciaries must become familiar and comply with all other federal and state laws applicable to the fiduciary's particular field of practice, including the rules and restrictions imposed by regulatory bodies such as the Securities and Exchange Commission (SEC), General Accounting Office (GAO), Department of Labor, and the Internal Revenue Service (IRS).
The Foundation for Fiduciary Studies is a nonprofit organization that was established to develop and advance practice standards of care (practices) for investment fiduciaries, which includes trustees and investment committee members, as well as brokers, bankers, and investment advisors. It is independent of any ties to the investment community and therefore, positioned to be a crucible for advancing the practice standards of care.
The American Institute of Certified Public Accountants is the national professional organization of CPAs, with more than 330,000 members in business and industry, public practice, government, and education.