The Fiduciary Advantage
The “Fiduciary Advantage” refers to the higher standard of mandated knowledge, experience, responsibility and reporting provided by Portfolio Managers. It is a distinct benefi t for their clients.
FOR PRIVATE & INSTITUTIONAL CLIENTS
Portfolio Managers off er an inherent advantage that provides private client and institutional investors with an additional measure of confi dence. They are fi duciaries, with a duty to act in their clients’ best interests.
HIGHER STANDARDS ACROSS THE BOARD
Fiduciaries are permitted to act with discretionary authority for other parties. They are held to a higher standard of conduct. They must have a higher level of education and experience to qualify for undertaking their duties. And they provide more detailed reporting compared with retail investment alternatives.
PMAC MEMBERS ARE DIFFERENT
The Portfolio Managers who belong to PMAC are fi duciaries. This creates a signifi cant point of diff erence between them and other fi nancial professionals in the investment sector lacking fi duciary status.
HIGHER LEVEL OF QUALIFICATIONS & EXPERIENCE
Portfolio Managers provide investment advice and manage investment portfolios based on an Investment Policy Statement (IPS) or discretionary authority granted by their clients. To qualify as Portfolio Managers and have fi duciary status, they must meet the highest education and experience level in the investment industry:
Advising Representative Qualifi cation Requirements
CFA + 12 months’ relevant experience in 36-month period before obtaining registration
CIM + 48 months’ relevant experience: 12 months in 36-month period before obtaining registration
“Asset managers hold a unique place of trust in the lives of millions of investors. Investment professionals and fi rms that undertake and perform their responsibilities with honesty and integrity are critical to maintaining investors’ trust and confi dence and to upholding the client covenant of trust, loyalty, prudence, and care.”
CFA Institute Asset Manager Code of Professional Conduct, Second Edition, 2010
“The legal system recognizes … special relationships in which one party is required to look after the best interests of the other in an exemplary manner. … Fiduciary relationships … require that fi duciaries act … strictly in the best interests of the benefi ciaries… .
” Historica Canada, thecanadianencyclopedia.ca., “Fiduciary Obligation, Law of
THE FIDUCIARY ADVANTAGE
IN BELONGING TO PMAC, PORTFOLIO MANAGERS ALIGN THEMSELVES WITH THESE VALUES
Advocate the highest standards of unbiased portfolio management in the best interest of investors who rely on their investment expertise
Complete independence in portfolio management; actions and decisions must be free of bias or self-interest
Responsibility to the Investor
Give unbiased and continuous management of client assets with the goal of providing consistently sound investment management regardless of ever-changing market conditions
Investment counsel should be of demonstrated investment ability and unquestioned integrity PMAC members must consistently act with skill, competence and diligence
ABOUT PMAC & ITS MEMBERSHIP
PMAC was founded 1952 as the Investment Counsel Association of Ontario (ICAO). It formally changed its name to PMAC in 2010 to reflect the growth and diversity of its membership, which has representation throughout every major centre in Canada. In addition to being Portfolio Managers, many member firms also hold Investment Fund Manager (IFM) or Exempt Market Dealer (EMD) registrations. All PMAC members share a commitment to Advancing Standards. Today, PMAC’s membership consists of more than 250 investment management firms managing more than $2.0 trillion for millions of Canadian investors: private clients, institutions, endowments, pension plans.
“Place the integrity of the investment profession and the interests of clients above their own personal interests.
” CFA Code of Ethics and Standards of Professional Conduct, 2014
“A fiduciary has a duty of care, a duty of loyalty, a duty to not allow personal interest to conflict with the fiduciary duties, a duty to not profit from a position as a fiduciary and a duty to deal with an even hand between competing interests.”
“The precarious balance of fiduciary duty.” BenefitsCanada.com, April 27, 2012