AIF EXAM SCRIPT TESTED QUESTIONS FULL
SOLUTION PREMIUM STUDY MATERIAL
●● Standard of Care - Fair Dealing
Answer: 1- Rules and transaction-based
• Arms-length relationship
2 - Divided loyalty of agent between firm and customer:
• Conflicts may exist unmanaged and undisclosed
3 - Deal fairly, consistent with industry suitability standard:
• Suitability standard rapidly evolving
●● Global Fiduciary Standards of Excellence
Answer: the investment process FI360 designed to ensure investment
decisions are prudently managed.
●● Investment Fiduciary
Answer: someone who is managing the assets of another person and
stands in a special relationship of trust, confidence, and /or legal
responsibility.
●● Investment Stewards
Answer: manage the overall investment decision-making process
,●● Investment Advisors
Answer: professionals who provide comprehensive and continuous
advice to Stewards.
●● Investment Managers
Answer: make securities transaction decisions and generally act with
discretion.
●● How many investment Stewards?
Answer: more than five million men and women, responsible for
managing more than 80% of the nation's liquid invested assets.
●● Examples of Stewards
Answer: individuals who serve as:
• trustees;
• committee members for endowments, foundations, and
other institutional accounts;
• plan sponsors; or
• who occupy similar positions entrusted with managing
assets for others.
• stand at the top of the fiduciary pecking order.
,●● How many Investment Advisors
Answer: Approximately 317,000* investment advisors as of 2011
●● Examples of Investment Advisors
Answer: - wealth managers
- financial advisors
- trust officers
- financial consultants
- investment consultants
- financial planners
●● Defining characteristic of Investment Advisors
Answer: Prudent Experts who give comprehensive and continuous
advice
●● How many Investment Managers
Answer: There are more than 16,400 investment companies in the U.S
employing
●● Examples of Investment Managers
Answer: - mutual fund managers
- exchange traded fund (ETFs) managers
- separately managed accounts managers
, ●● Defining characteristic of Investment Manager
Answer: Prudent experts who exercise discretion
●● What Fiduciary duty do Stewards and Advisors have?
Answer: Stewards and Advisors have a fiduciary duty to demonstrate
that the
Investment Managers they use have been prudently selected and are
monitored on an ongoing basis.
●● What are Investment Stewards, Advisors, and Managers practices
based on?
Answer: Steward & Advisor practices are grounded in legislation, case
law, and regulatory opinion letters
Investment Manager practices are principle-driven
●● T or F: Investment advisors and registered representatives (brokers)
are both held to a fiduciary standard of care when dealing with their
client.
Answer: False:
Investment advisors are held to a fiduciary standard of care with their
client while brokers are held to a suitability standard. The advisor must
SOLUTION PREMIUM STUDY MATERIAL
●● Standard of Care - Fair Dealing
Answer: 1- Rules and transaction-based
• Arms-length relationship
2 - Divided loyalty of agent between firm and customer:
• Conflicts may exist unmanaged and undisclosed
3 - Deal fairly, consistent with industry suitability standard:
• Suitability standard rapidly evolving
●● Global Fiduciary Standards of Excellence
Answer: the investment process FI360 designed to ensure investment
decisions are prudently managed.
●● Investment Fiduciary
Answer: someone who is managing the assets of another person and
stands in a special relationship of trust, confidence, and /or legal
responsibility.
●● Investment Stewards
Answer: manage the overall investment decision-making process
,●● Investment Advisors
Answer: professionals who provide comprehensive and continuous
advice to Stewards.
●● Investment Managers
Answer: make securities transaction decisions and generally act with
discretion.
●● How many investment Stewards?
Answer: more than five million men and women, responsible for
managing more than 80% of the nation's liquid invested assets.
●● Examples of Stewards
Answer: individuals who serve as:
• trustees;
• committee members for endowments, foundations, and
other institutional accounts;
• plan sponsors; or
• who occupy similar positions entrusted with managing
assets for others.
• stand at the top of the fiduciary pecking order.
,●● How many Investment Advisors
Answer: Approximately 317,000* investment advisors as of 2011
●● Examples of Investment Advisors
Answer: - wealth managers
- financial advisors
- trust officers
- financial consultants
- investment consultants
- financial planners
●● Defining characteristic of Investment Advisors
Answer: Prudent Experts who give comprehensive and continuous
advice
●● How many Investment Managers
Answer: There are more than 16,400 investment companies in the U.S
employing
●● Examples of Investment Managers
Answer: - mutual fund managers
- exchange traded fund (ETFs) managers
- separately managed accounts managers
, ●● Defining characteristic of Investment Manager
Answer: Prudent experts who exercise discretion
●● What Fiduciary duty do Stewards and Advisors have?
Answer: Stewards and Advisors have a fiduciary duty to demonstrate
that the
Investment Managers they use have been prudently selected and are
monitored on an ongoing basis.
●● What are Investment Stewards, Advisors, and Managers practices
based on?
Answer: Steward & Advisor practices are grounded in legislation, case
law, and regulatory opinion letters
Investment Manager practices are principle-driven
●● T or F: Investment advisors and registered representatives (brokers)
are both held to a fiduciary standard of care when dealing with their
client.
Answer: False:
Investment advisors are held to a fiduciary standard of care with their
client while brokers are held to a suitability standard. The advisor must
