At Fragasso, the recommendations we make start and end with what is in your best interest. Your financial advisor should serve as an advocate to you and/or your organization, offering the skills and resources that give you confidence in your financial planning and investment decisions, so you can dedicate yourself to your goals and mission.
This is why many of our financial advisors have earned the additional designation of AIF®, an Accredited Investment Fiduciary®. This designation means that our people have a thorough knowledge of and ability to apply fiduciary practices; they are qualified to act in a fiduciary capacity, thus elevating us above many investment advisors, brokers or insurance professionals. With Fragasso, you will have a partner with equal moral and legal responsibility, thus providing you with added comfort that your fiduciary responsibility is shared by your advisor.
Why AIF® for Nonprofit Organizations?
T.J. DROST, CFP®, CFS®, AIF®, Fragasso’s Vice President, Institutional Assets Manager, takes his role as a fiduciary partner very seriously. His focus includes servicing nonprofit organizations and institutional clients. He is responsible for the ongoing management and monitoring of their investment portfolios as well as helping our nonprofit partners fulfill their fiduciary responsibilities. We asked T.J. to answer a few questions about his experience with the AIF®
Q. What does it mean to be a fiduciary in the finance industry?
A. A fiduciary acts on behalf of another person or persons, putting their clients’ interests ahead of their own, with a duty to preserve good faith and trust. Being a fiduciary requires being bound both legally and ethically to act in the other’s best interests.
Q. What encouraged you to pursue the AIF® designation?
A. Although I have always acted in my client’s best interest over my career, it was my desire to continue learning and educating myself further to enhance my skills and ensure that I was providing my clients with the optimal client experience. I felt that obtaining the AIF® designation would reinforce my commitment to holistic planning and provide my clients with peace of mind that I truly strive for. It shows that I am committed to always acting in their best interests in all facets of our relationship.
Q. When hiring a financial advisor, should a nonprofit organization search for one with this designation?
A. Yes, I believe it is important for nonprofit organizations to seek out financial advisors with the AIF® designation. Here at Fragasso, we act as co-fiduciaries with all our nonprofit client relationships. This is not the standard in the industry. This makes it imperative that nonprofits should seek out advisors who have a comprehensive understanding of fiduciary responsibilities and the AIF® designation.
Q. What does it mean to you to be an investment fiduciary?
A. I believe that it is the foundation of any relationship that I have with a client. In my 22 years of working with clients, the fiduciary standard has always been at the forefront of my interaction and financial development with clients. I believe it is common sense to put your client’s needs first so that they can reach their goals. Ethically, I am not sure how an advisor can work in this industry without adhering to the fiduciary standard.
Q. How do you obtain this designation?
A. In order to obtain the AIF® designation, candidates must register with Fi360. Fi360 is accredited by the American National Standards Institute for the AIF® designation. Candidates must complete the following requirements:
1. Enroll in and complete AIF® Training that satisfies AIF® Training requirements
2. Pass the AIF® Examination
3. Meet the experience requirement (prerequisites)
4. Satisfy the Code of Ethics and Conduct Standards
5. Submit the application and dues
Q. How are your specialized skills helping nonprofit investors at a greater capacity than a less trained advisor?
A. Certainly, experience along with advanced education and continual learning has been integral in assisting our nonprofit clients. The ability to actively listen and provide input and recommendations has been beneficial to both our clients and to our firm. It is my goal to dig deep and gain an understanding of each nonprofit that we work with. A less trained advisor may be hesitant to ask difficult questions or provide recommendations to the board of directors. We aim to work cohesively with the board of directors and share ideas to work together as a team so the organization can flourish, and the assets can be counted on to support the organizations future goals and initiatives.
Q. How can your skills better guide nonprofit fiduciaries and trustees?
A. Again, experience is integral. I work at being inquisitive and sharing ideas and thoughts with the fiduciaries and trustees. I believe this facilitates conversations and provides deeper insight into what can be achieved when we work together. Very often, organizations are looking for assistance on their Investment Policy Statement (IPS). This document is the instrument that guides how the investment is to be managed. I enjoy working with the nonprofit fiduciaries and trustees on solidifying their IPS. My exposure to this particular area allows me to be a resource and to provide ideas on items that may need updated, added or removed from the IPS. I find it satisfying to assist in these areas.
Q. What are the yearly education requirements to maintain your credentials?
A. For the AIF®, I need to satisfy at least 6 hours of continuing education per year. Again, I think that the continual learning and education is fulfilling and certainly strengthens my knowledge. Ultimately, I can apply this knowledge and help our nonprofit clients fund and sustain the missions they feel so strongly about.
Very few small business owners, managers or executives seem to realize that as a plan sponsor, or steward, you are responsible and have a legal duty to act in the best interest of the person and organization that has entrusted you with the management and control of their retirement assets.
Why AIF® for Employer-Sponsored Retirement Plans
DAN TATOMIR, AIF®, Vice President, Manager of Retirement Plan
Advisors, focuses exclusively on helping these retirement plans. We asked him to
explain why this designation is integral to his work
Q. How does this designation help you in retirement plan offerrings to businesses and organizations?
A. The AIF® designation furthered my education and industry knowledge especially as it pertains to fiduciary
review and documentation. We want to always look for ways to improve a retirement plan while also ensuring
it is being administered in a way that protects plan sponsors as much as possible.
Q. What encouraged you to pursue this designation?
A. Part of my reason to acquire the AIF® was the additional education. The retirement plan industry is ever
evolving as providers add or change services, and new or amended legislation can often require changes to
a plan document or the way a plan is administered. I want to make sure I stay up to date on current law and
industry trends to provide my clients the best advice for their plan. I also pursued the designation to reinforce
the fact that I hold myself to the fiduciary standard of putting clients first.
Q. What does it mean to you to be an investment fiduciary?
A. I have worked directly with retirement plans and retirement plan participants for most of my career. I know
firsthand that an employer-sponsored retirement plan, like a 401(k) or 403(b) plan, is usually the best option
for most people to save the money needed for a secure retirement. For many, most of their assets are in their
retirement plan. This puts greater importance on the quality of the plan offered. I feel great satisfaction
helping business owners and plan committees design strong retirement plans for employees to use. When
I of fer advice to make improvements or add features, I want decision makers to experience confidence in
that the advice I provide will benefit the plan sponsors and their employees first and foremost. It just seems
obvious to me that if I am working with a client, any advice I offer should be with their best interest in mind.
Q. What tools help you serve your clients?
A. One of the tools we use to monitor and evaluate a plan’s investment lineup is Fi360’s fiduciary score. This
compiles 11 quantitative data points such as manager tenure, performance over several time periods, expense
ratio, risk level, etc. and calculates a score that enables investments in the same category to be compared to
one another. From there, our portfolio analysts research the qualitative aspects of the fund, such as what has
driven performance historically, and do we have confidence in the current management and strategy of the
fund?
We recommend that our clients have an Investment Policy Statement (IPS) to serve as the foundation of all
investment related decisions in the plan. This details the criteria an investment needs to meet to be included,
and remain in, the plan’s investment lineup. As part of our periodic investment review, we send our clients a
report to include the Fi360 fiduciary score that is tied back to their IPS. The Fi360 score is a good tool to help
show a prudent investment review process is in place.
Q. How are your specialized skills helping businesses and institutional plans at a greater capacity than a less trained advisor?
A. Providing advice to a retirement plan is very different than advising an individual with their financial plan.
Even though both deal with saving and investing, there are unique aspects to retirement plans that are
important to understand to provide the best advice to plan sponsors. This takes experience and expertise that
not all financial advisors have. Plan sponsors take on responsibility and liability when offering a retirement
plan. To help mitigate their liability risk, and for the benefit of participants in the plan, they should seek out
the help of a knowledgeable retirement plan advisor who will serve in a fiduciary capacity.
Q. How can your skills better guide the organizations’ fiduciaries and trustees?
A. Every business is unique. The goals of offering a plan can vary. Employee demographics vary and change over
time. Being an advisor dedicated solely to retirement plans gives me the knowledge and experience to help
plan sponsors feel confident that their plan fits the needs of the organization while providing employees
an important benefit. Changes to plan design, day-to-day administration or the providers the plan uses can
have a meaningful impact on plan sponsor liability and participant usage of the plan which can lead to better
retirement outcomes.