Volunteer board members and individuals who serve as trustees are often not fully aware of the liabilities involved in their role as fiduciary. As stewards of public trust, volunteers who serve on local nonprofit boards, foundations and endowments are considered a fiduciary, and have a legal and ethical responsibility to exercise due diligence when servicing as trustees of an organization’s assets.

FIDUCIARY 101: Along with Raymond James Consulting Services, we offer educational trainings and investment policy reviews to help board members better understand their legal standing and responsibilities as fiduciaries. If you serve on a nonprofit board, inquire about McGee Wealth Management’s complimentary service.

Both the Uniform Prudent Investor Act (UPIA) and the Uniform Prudent Management of Institutional Funds Act (UPMIFA) set the standard for who is a fiduciary and their responsibilities.

The following are considered fiduciaries:
  • Trustees/board members
  • Investment advisors
  • CPAs
  • Company officers, owners and directors
  • Plan administrators
  • Investment management consultants

We take your role as fiduciary very seriously and our guidance can help you understand your role and the processes deemed prudent.

Roles of a Fiduciary
  • Investment Steward – manages overall investment decision-making process. Example: Board committee members, trustees of personal trusts
  • Investment Advisor – manages comprehensive and continuous investment decisions. Example: Financial advisors, planners, trust officers
  • Investment Manager – makes investment decisions and selects specific securities for separate accounts.
The Fiduciary Effect

One of the most critical concepts is that fiduciary responsibility is about process; it’s not about performance.

Fiduciary liability arises when the process is not defined and/or is inconsistently applied. When acting as an investment fiduciary, you have a critical duty to manage a prudent investment process. The Trustee and Board education that we provide can help you understand and review your investment policies and processes.

"A fiduciary shall discharge his duties with respect to a plan . . . in accordance with the documents and instruments governing the plan."

(ERISA Sec. 404(a)(D).29 U.S.C.A. 1104(a).)

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