Understanding Accredited Investment Fiduciary (AIF)

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Understanding Accredited Investment Fiduciary (AIF)

Post by Cody » Wed Dec 06, 2017 10:31 am

Could you tell me if someone with Accredited Investment Fiduciary (AIF) is adequate accrediation to give people financial advice. I am trying to vet the accreditation for myself and others.


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Re: Understanding Accredited Investment Fiduciary (AIF)

Post by KSActuary » Wed Dec 06, 2017 11:50 am

Here is the descriptor from fi360 who provides training for the designation.

"The AIF Designation Training and designation help mitigate this liability with instruction covering pertinent legislation and best practices. Accredited Investment Fiduciary® (AIF®) designees have the ability to implement a prudent process into their own investment practices as well as being able to assist others in implementing proper policies and procedures."

As to whether or not this training makes someone adequate training financial advice is another matter. The AIF designation to me implies that someone has gone to the trouble to understand the fiduciary rules and how they affect the investment process. It does not necessarily make them a good investment manager.

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Re: Understanding Accredited Investment Fiduciary (AIF)

Post by BL » Wed Dec 06, 2017 12:16 pm

It appears that the person has taken a class and passed the exam for that certification. They should know the meaning of fiduciary.

Whether they will act as your fiduciary is another question. Will they sign a statement stating that they will act as your fiduciary in every way? How much will it cost you? How do they make money? Do they use low-ER index funds? Do they profit from giving advice on insurance products (life insurance, annuities)?

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Re: Understanding Accredited Investment Fiduciary (AIF)

Post by venkman » Thu Dec 07, 2017 1:16 am

To legally give investment advice (and get paid to do it), one has to pass the Series 65 exam and register with the appropriate authority (usually a state administrator). This AIF thing appears to be one of the many unofficial professional "credentials" that are offered by various companies. I wouldn't put much stock in it (although anyone who bothers to pay for the certification is probably already working in the industry, and has presumably already passed their Series 65 exam.)

FINRA has a broker check site where you can check the background of anyone working in the industry: https://brokercheck.finra.org/

For what it's worth, I passed the Series 65 earlier this year. It took me ~2 months of studying for maybe an hour a day. I haven't registered because I don't plan to work in the industry; but I'm eligible to register, and I could be a legitimate, paid investment adviser. There is absolutely zero useful investment advice I could provide that could not be obtained for free by spending some time reading the various wikis on this page for free. (The main reason I took the 65 exam was to convince my mom to let me put her money in index funds, and get them away from the "fiduciary" adviser who was charging 1.5% per year for sub-par advice.) A commonly-quoted saying around here is, "When you know enough to choose a good financial adviser, you no longer need one."

Investing is easy, because the simplest investments are generally the best. For someone who is very intimated by the whole thing and wants nothing to do with it, Vanguard's Personal Advisory Service only charges 0.3% per year, and its advisers have no conflicts of interest.

If you're looking for someone to handle comprehensive financial planning (which includes investing, insurance, taxes, estate planning, etc.), that's a lot more complicated, and certainly worth paying a professional to help with. But make sure you ONLY use someone who gets paid based on their time (either an hourly rate, or a set amount for a financial plan). Anyone who makes money from commissions, or takes a yearly percentage of assets, has inherent conflicts of interest, even if they're considered a fiduciary.

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