A number of high-profile fiduciary advocates announced Tuesday that they joined together to form the Center for Board Certified Fiduciaries (CBCF), a public benefit corporation with 35 founding members that they say will seek to “accelerate the development of exemplary fiduciaries.”
“I wanted an organization consisting of people that weren’t using fiduciary as a marketing tool but using it as the core of their being and have learned how to be successful with it,” said Don Jones, CEO and founder of Fiduciary Wise and CBCF’s Chairman of the Board. “That gave birth to what we have now today.”
CBCF’s purpose is three-fold:
- Affiliate with one or more universities to provide an executive education certificate in fiduciary leadership, stewardship, and governance. Over time, develop the curricula for the first masters with a concentration in fiduciary responsibility.
- Provide the critical infrastructure to conduct and publish research and thought leadership on fiduciary standards and associated best practices.
- Board certify fiduciary professionals in a specific field of specialization. For example, a person may seek to be board certified to work with defined contribution (DC) plans, while another may desire to be board certified to work with foundations and endowments.
“I have been an expert witness for the Department of Labor on qualified plans, including 401k plans, for many years,” attorney and CEFEX analyst Keith Alden Loveland explained when asked about the need for such a certification. “What we find is that people say, ‘Hey, I had no idea what the rules were, and in no way could I make the decisions that were necessary.’ I’ve been hearing this for 40 years, so we’re responding to an outcry of millions of folks in the United States.”
Investment rules, regulations, products, and strategies have become so complicated—and litigation so prevalent—that it’s reached a point where the average investment committee member does not understand their fiduciary role, 3ethos CEO and “Father of Fiduciary” Don Trone argued.
LEARN MORE ABOUT THE CBCF MISSION AND CERTIFICATIONS HERE
“When we put documents in front of our clients that we know they do not fully comprehend, we, in turn, have breached our own fiduciary responsibility,” he said. “And we don’t have a standard of care to identify the professionals who are uniquely qualified to take on that outsourcing responsibility.”
As one would expect, the founding members are all well-versed in fiduciary expertise. Most have either the AIF or AIFA designation, and a number are active CEFEX analysts.
“What’s happening here takes this to a further academic level, and the specialization it offers differentiates it,” Kathleen M. McBride, President of FiduciaryPath and a CEFEX Analyst, noted.
Trone compared it to the specialization that physicians employ. He explained that the financial professional might choose to work with foundations, endowments, retirement plans, or other specific areas, and therefore have a curriculum dedicated to those topics.
“What will quickly evolve, depending on the university partners or partners we end up with, is a move from an executive-level certificate to graduate-level coursework,” Trone said, although he was not at liberty to go on the record with the top institution with whom they’re currently in talks. “We’re formalizing the academic and scientific curricula so we can make better, more informed fiduciary decisions. We’re anticipating that in 12 to 18 months now, we’ll be offering a certificate for graduate-level credit.”
The CBCF will initially assign a mentor to a candidate for the Board Certified Fiduciary™ (BCF™) to explain the certification process and assist with determining areas of interest and specialization.
The candidate will first take a proprietary psychometric instrument to assess their leadership, stewardship, and decision-making capacity. They will then move to the study of a uniform decision-making process, something that can be used in a fiduciary setting, as well as by a board of directors to define a governance standard and C-suite executives to define a practice management standard.
“We’re going to be able to reach a lot more people with that particular framework,” Trone concluded.
See Also:
- New Fiduciary Best Practices for Insurance and Annuities: CBCF
- University Programs in Fiduciary Studies Announced
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
