AIF® Designation Prep- Global Fiduciary Standards &
Fi360 Prudent Practices The 4-Step Management System
(2026)
What is the purpose of the publication 'Prudent Practices for Investment Advisors'? - ANS -To
define a global fiduciary standard of excellence for professionals who provide investment
advice.
Who are the primary professionals targeted by the 'Prudent Practices for Investment Advisors'?
- ANS -Financial advisors, broker-consultants, trust officers, financial planners, and fiduciary
advisors.
Who authored the 'Prudent Practices for Investment Advisors'? - ANS -Fi360.
What organization provided technical review for the publication? - ANS -American Institute of
Certified Public Accountants (AICPA).
What is the legal status of investment advisors as mentioned in the publication? - ANS -
Investment advisors have specific legal statuses and laws governing their relationships with
clients.
What type of professionals are referred to as 'investment fiduciaries'? - ANS -Professionals who
serve in a fiduciary capacity, including investment advisors and stewards.
What is the intended audience for the handbooks published by Fi360? - ANS -Knowledgeable
investment professionals, stewards, and investors with some experience in investment
management.
What is the focus of the 'Prudent Practices for Investment Stewards'? - ANS -Fiduciary practices
for individuals responsible for managing investment decisions, such as trustees and investment
committee members.
What is the significance of the term 'fiduciary standard of excellence'? - ANS -It represents a
benchmark for ethical and professional conduct in the provision of investment advice.
What does the publication assume about its readers' experience? - ANS -It assumes that readers
have some experience and familiarity with basic investment management concepts and
procedures.
,What is the copyright status of the publication? - ANS -Copyright © 2006-2019 by Fi360, Inc. All
rights reserved.
What is the publication's stance on reproduction and distribution? - ANS -No part of the
publication may be reproduced or distributed without prior written permission from the
publisher.
What is the role of the contributors listed in the publication? - ANS -They provide expertise and
insights related to fiduciary practices and investment advice.
What are the two main types of handbooks published by Fi360? - ANS -Handbooks for
investment advisors and handbooks for investment stewards.
What is the primary goal of the series of fiduciary handbooks by Fi360? - ANS -To define Global
Fiduciary Standards of Excellence.
What is the relationship between the 'Prudent Practices for Investment Advisors' and 'Prudent
Practices for Investment Stewards'? - ANS -Both are part of a series aimed at establishing
fiduciary standards for different roles in investment management.
Who is responsible for the legal review of the publication? - ANS -Carlos Panksep from Drinker
Biddle & Reath LLP and Duane Thompson from Hamburger Law Firm, LLC.
What is the significance of the term 'fiduciary practices' in the context of this publication? - ANS
-It refers to the ethical and legal responsibilities of professionals managing investments.
What is the publication's approach to investment management guidance? - ANS -It is not a 'how
to' manual for beginners but a reference guide for experienced professionals.
What does the term 'investment fiduciaries' encompass? - ANS -It encompasses professionals
who have a legal obligation to act in the best interest of their clients.
What type of content can be found in the handbooks published by Fi360? - ANS -Reference
material on fiduciary standards and practices for investment professionals.
What is the expected outcome for professionals using the Fi360 handbooks? - ANS -To enhance
their understanding and application of fiduciary standards in investment advice.
What is the primary focus of the handbook 'Prudent Practices for Investment Managers'? - ANS
-To define a global fiduciary standard of excellence for professionals who provide investment
advice.
Who are the intended professionals for the fiduciary practices outlined in the handbook? - ANS -
Financial advisors, broker-consultants, trust officers, financial planners, and fiduciary advisors.
,What organization authored the 'Prudent Practices for Investment Managers' handbook? - ANS -
Fi360.
What is the role of investment fiduciaries as mentioned in the handbook? - ANS -To have
discretion to select specific securities for various investment vehicles including separate
accounts and mutual funds.
What is the first step in the investment management process according to the handbook? - ANS
-Organize.
What is the purpose of Practice 1.1 in the investment management process? - ANS -To
demonstrate an awareness of fiduciary duties and responsibilities.
What does Practice 1.2 emphasize regarding investments and services? - ANS -They must be
consistent with governing documents and comply with statutory or regulatory investment safe
harbors.
What is the focus of Practice 1.3 in the investment management process? - ANS -Defining and
documenting the roles and responsibilities of all involved parties.
What does Practice 1.4 address in terms of conflicts of interest? - ANS -Identifying material
conflicts of interest and managing them consistent with the duty of loyalty.
What is required of agreements under the supervision of the investment advisor according to
Practice 1.5? - ANS -They must be in writing and not contain provisions that conflict with
fiduciary obligations.
What is the focus of Practice 1.6 regarding client information? - ANS -To prudently protect
sensitive personal identifying information and assets from theft and risks.
What is the second step in the investment management process? - ANS -Formalize.
What does Practice 2.1 require regarding investment objectives? - ANS -An investment time
horizon must be identified for each investment objective of the client.
What is the purpose of Practice 2.2 in the investment management process? - ANS -To identify
an appropriate risk level for the portfolio.
What does Practice 2.3 involve? - ANS -Periodic reviews of qualitative and/or organizational
changes of investment managers and other service providers.
What is the focus of Practice 2.4 in relation to asset classes? - ANS -Selected asset classes must
be consistent with the portfolio's time horizon and risk and return objectives.
, What does Practice 2.5 ensure regarding investment-related fees? - ANS -That they are fair and
reasonable for the services provided.
What is the third step in the investment management process? - ANS -Implement.
What is the fourth step in the investment management process? - ANS -Monitor.
What does Practice 4.1 involve in the monitoring phase? - ANS -Periodic reviews comparing
investment performance against market and peer group benchmarks.
What is evaluated in Practice 4.2 regarding portfolio returns? - ANS -The distribution of
projected portfolio returns in the context of the client's risk and return objectives.
What does Practice 4.3 require regarding trading practices? - ANS -Procedures should be in
place to periodically review policies for trading practices and proxy voting.
What is the focus of Practice 4.4 in the monitoring phase? - ANS -Ensuring selected asset classes
are consistent with implementation and monitoring constraints.
What is the purpose of the periodic review process mentioned in the notes? - ANS -To assess
the organization's effectiveness in meeting its fiduciary responsibilities.
What does the investment policy statement define and monitor? - ANS -It defines, implements,
and monitors the portfolio's investment strategy.
What factors are considered in investment due diligence according to the notes? - ANS -
Environmental, social, and governance (ESG) factors.
What year was the third major revision of the Prudent Practices published? - ANS -2019
What standard did Fi360 follow during the review process? - ANS -The American National
Standards Institute (ANSI) under the ISO 17024:2012 standard.
What is the significance of the Practices and Criteria found in the handbook? - ANS -They serve
as a guide to investment fiduciary responsibility and a standard for AIF® designation candidates.
What was one of the main goals of the review process for the Prudent Practices? - ANS -To
simplify language and eliminate unnecessary qualifiers.
How many Practices are included in the final version of the handbook? - ANS -21 Practices.
What was the change in the number of Criteria from the previous version to the current
version? - ANS -The number of Criteria decreased from 85 to 79.
How many Practices received substantial overhauls during the review? - ANS -Three Practices.
Fi360 Prudent Practices The 4-Step Management System
(2026)
What is the purpose of the publication 'Prudent Practices for Investment Advisors'? - ANS -To
define a global fiduciary standard of excellence for professionals who provide investment
advice.
Who are the primary professionals targeted by the 'Prudent Practices for Investment Advisors'?
- ANS -Financial advisors, broker-consultants, trust officers, financial planners, and fiduciary
advisors.
Who authored the 'Prudent Practices for Investment Advisors'? - ANS -Fi360.
What organization provided technical review for the publication? - ANS -American Institute of
Certified Public Accountants (AICPA).
What is the legal status of investment advisors as mentioned in the publication? - ANS -
Investment advisors have specific legal statuses and laws governing their relationships with
clients.
What type of professionals are referred to as 'investment fiduciaries'? - ANS -Professionals who
serve in a fiduciary capacity, including investment advisors and stewards.
What is the intended audience for the handbooks published by Fi360? - ANS -Knowledgeable
investment professionals, stewards, and investors with some experience in investment
management.
What is the focus of the 'Prudent Practices for Investment Stewards'? - ANS -Fiduciary practices
for individuals responsible for managing investment decisions, such as trustees and investment
committee members.
What is the significance of the term 'fiduciary standard of excellence'? - ANS -It represents a
benchmark for ethical and professional conduct in the provision of investment advice.
What does the publication assume about its readers' experience? - ANS -It assumes that readers
have some experience and familiarity with basic investment management concepts and
procedures.
,What is the copyright status of the publication? - ANS -Copyright © 2006-2019 by Fi360, Inc. All
rights reserved.
What is the publication's stance on reproduction and distribution? - ANS -No part of the
publication may be reproduced or distributed without prior written permission from the
publisher.
What is the role of the contributors listed in the publication? - ANS -They provide expertise and
insights related to fiduciary practices and investment advice.
What are the two main types of handbooks published by Fi360? - ANS -Handbooks for
investment advisors and handbooks for investment stewards.
What is the primary goal of the series of fiduciary handbooks by Fi360? - ANS -To define Global
Fiduciary Standards of Excellence.
What is the relationship between the 'Prudent Practices for Investment Advisors' and 'Prudent
Practices for Investment Stewards'? - ANS -Both are part of a series aimed at establishing
fiduciary standards for different roles in investment management.
Who is responsible for the legal review of the publication? - ANS -Carlos Panksep from Drinker
Biddle & Reath LLP and Duane Thompson from Hamburger Law Firm, LLC.
What is the significance of the term 'fiduciary practices' in the context of this publication? - ANS
-It refers to the ethical and legal responsibilities of professionals managing investments.
What is the publication's approach to investment management guidance? - ANS -It is not a 'how
to' manual for beginners but a reference guide for experienced professionals.
What does the term 'investment fiduciaries' encompass? - ANS -It encompasses professionals
who have a legal obligation to act in the best interest of their clients.
What type of content can be found in the handbooks published by Fi360? - ANS -Reference
material on fiduciary standards and practices for investment professionals.
What is the expected outcome for professionals using the Fi360 handbooks? - ANS -To enhance
their understanding and application of fiduciary standards in investment advice.
What is the primary focus of the handbook 'Prudent Practices for Investment Managers'? - ANS
-To define a global fiduciary standard of excellence for professionals who provide investment
advice.
Who are the intended professionals for the fiduciary practices outlined in the handbook? - ANS -
Financial advisors, broker-consultants, trust officers, financial planners, and fiduciary advisors.
,What organization authored the 'Prudent Practices for Investment Managers' handbook? - ANS -
Fi360.
What is the role of investment fiduciaries as mentioned in the handbook? - ANS -To have
discretion to select specific securities for various investment vehicles including separate
accounts and mutual funds.
What is the first step in the investment management process according to the handbook? - ANS
-Organize.
What is the purpose of Practice 1.1 in the investment management process? - ANS -To
demonstrate an awareness of fiduciary duties and responsibilities.
What does Practice 1.2 emphasize regarding investments and services? - ANS -They must be
consistent with governing documents and comply with statutory or regulatory investment safe
harbors.
What is the focus of Practice 1.3 in the investment management process? - ANS -Defining and
documenting the roles and responsibilities of all involved parties.
What does Practice 1.4 address in terms of conflicts of interest? - ANS -Identifying material
conflicts of interest and managing them consistent with the duty of loyalty.
What is required of agreements under the supervision of the investment advisor according to
Practice 1.5? - ANS -They must be in writing and not contain provisions that conflict with
fiduciary obligations.
What is the focus of Practice 1.6 regarding client information? - ANS -To prudently protect
sensitive personal identifying information and assets from theft and risks.
What is the second step in the investment management process? - ANS -Formalize.
What does Practice 2.1 require regarding investment objectives? - ANS -An investment time
horizon must be identified for each investment objective of the client.
What is the purpose of Practice 2.2 in the investment management process? - ANS -To identify
an appropriate risk level for the portfolio.
What does Practice 2.3 involve? - ANS -Periodic reviews of qualitative and/or organizational
changes of investment managers and other service providers.
What is the focus of Practice 2.4 in relation to asset classes? - ANS -Selected asset classes must
be consistent with the portfolio's time horizon and risk and return objectives.
, What does Practice 2.5 ensure regarding investment-related fees? - ANS -That they are fair and
reasonable for the services provided.
What is the third step in the investment management process? - ANS -Implement.
What is the fourth step in the investment management process? - ANS -Monitor.
What does Practice 4.1 involve in the monitoring phase? - ANS -Periodic reviews comparing
investment performance against market and peer group benchmarks.
What is evaluated in Practice 4.2 regarding portfolio returns? - ANS -The distribution of
projected portfolio returns in the context of the client's risk and return objectives.
What does Practice 4.3 require regarding trading practices? - ANS -Procedures should be in
place to periodically review policies for trading practices and proxy voting.
What is the focus of Practice 4.4 in the monitoring phase? - ANS -Ensuring selected asset classes
are consistent with implementation and monitoring constraints.
What is the purpose of the periodic review process mentioned in the notes? - ANS -To assess
the organization's effectiveness in meeting its fiduciary responsibilities.
What does the investment policy statement define and monitor? - ANS -It defines, implements,
and monitors the portfolio's investment strategy.
What factors are considered in investment due diligence according to the notes? - ANS -
Environmental, social, and governance (ESG) factors.
What year was the third major revision of the Prudent Practices published? - ANS -2019
What standard did Fi360 follow during the review process? - ANS -The American National
Standards Institute (ANSI) under the ISO 17024:2012 standard.
What is the significance of the Practices and Criteria found in the handbook? - ANS -They serve
as a guide to investment fiduciary responsibility and a standard for AIF® designation candidates.
What was one of the main goals of the review process for the Prudent Practices? - ANS -To
simplify language and eliminate unnecessary qualifiers.
How many Practices are included in the final version of the handbook? - ANS -21 Practices.
What was the change in the number of Criteria from the previous version to the current
version? - ANS -The number of Criteria decreased from 85 to 79.
How many Practices received substantial overhauls during the review? - ANS -Three Practices.
