1. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS Prudent Practices for Investment Fiduciaries

2. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS Fi360

3. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS Fi360.com

4. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS Fiduciary Designations The Accredited Investment Fiduciary ® (AIF ® ) mark signifies the designee has acquired the knowledge to apply Global Fiduciary Standards of Excellence. The Accredited Investment Fiduciary Analyst™ (AIFA ® ) mark signifies the designee has demonstrated the knowledge to assess whether an investment fiduciary conforms to a Global Fiduciary Standard of Excellence.

5. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS Investment Fiduciary – Someone who is managing the assets of another person and stands in a special relationship of trust, confidence, and/or legal responsibility. Definitions

6. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS Investment Fiduciaries Stewards – Manage the investment decision making process (trustees, investment committee members, plan sponsors) Advisors – Provide comprehensive and continuous investment advice (wealth managers, financial advisors, trust officers, financial consultants, investment consultants, financial planners) Managers – Make investment decisions, and selects the individual securities to implement a specific investment mandate (such as large cap growth). 1

7. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS The Investment Steward More than 5 million men and women who serve as: Members of investment committees of retirement plans, foundations, and endowments Trustees of private trusts Stewards manage more than 80% of the nation’s liquid investable wealth, yet few have received formal training for their role.

8. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS Most Stewards share their fiduciary responsibilities with Investment Advisors. Even so, Investment Advisors: Are governed by a fragmented and outdated regulatory structure, Often have a limited understanding of the fiduciary code of conduct, and Have no uniform advanced education requirements. Therefore, effective due diligence in selecting Investment Advisors is critical. The Investment Advisor

9. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS Investment Managers make investment decisions. They select the individual securities to implement a specific investment mandate (such as large cap growth). There are 12,000+ Investment Managers in the U.S*. Examples include money managers who are responsible for separate accounts, mutual funds, commingled trusts, and unit trusts. The Steward and Advisor have a fiduciary duty to demonstrate that Investment Managers have been prudently selected and monitored *“Manager Statistics at a glance,” Pensions & Investments, May 28, 2007 The Investment Manager

10. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS Fiduciary Excellence

11. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS Fiduciary Legislation Enron collapse (2001) Revocation of the broker-dealer exemption (March 2007) LaRue v. DeWolff Supreme Court case (October 2007) ERISA litigation has increased at a rate of 25%/year over the past four years.

12. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS Legal Status

13. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS Responsibility vs. Liability Fiduciary responsibilities can be shared but not abdicated. Liability exposures exist where there are unfulfilled responsibilities. Fiduciaries can reduce liability by identifying and filling gaps in their practices.

14. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS Legislation, Regulation and Professional Self-governance SEC Pension Study (2005) www.sec.gov/news/studies/pensionexamstudy.pdf Pension Protection Act (2006) DOL disclosure initiatives (2008) Changes to Form 5500 Section 408(b)(2) Rule Change Disclosures to participants CFP Rules of Conduct

15. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS U.S. Legislation ERISA – Employee Retirement Income Security Act (Qualified retirement plans) UPIA – Uniform Prudent Investor Act (Private trusts, the default standard if nothing else “fits”) UPMIFA – Uniform Prudent Management of Institutional Funds Act (Foundations, endowments, and government sponsored charitable institutions) MPERS – Uniform Management of Public Employees Retirement Systems Act (State, county, and municipal retirement plans)

16. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS Global Fiduciary Precepts 1.Know standards, laws, and trust provisions 2.Diversify assets to specific risk/return profile of client 3.Prepare investment policy statement 4.Use “prudent experts” and document due diligence 5.Control and account for investment expenses 6.Monitor the activities of “prudent experts” 7.Avoid conflicts of interest and prohibited transactions

17. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS From Precepts to Practices Precepts are principles founded in law. Practices are applications of the precepts, founded in law and research. A Standard of Practices constitutes a body of knowledge as to what is required for a person or organization to meet recognized expectations

18. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS Fiduciary Quality Management Series

19. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS Periodic Table of Fiduciary Practices

20. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS The Fiduciary Handbook Series

21. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS Components of a Standard

22. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS Components of a Standard

23. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS Objectives of the Practices 1.Define prudent processes for investment fiduciaries that are comprehensive, but not cumbersome. 2.Provide a checklist approach to guide any investment fiduciary in the pursuit of fiduciary excellence. 3.Enable any organization to assess its fiduciary activities to determine conformity to Global Fiduciary Standards of Excellence.

24. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS The Meaning of Assessment Assessment is the: systematic, independent, and documented process, for obtaining assessment evidence and evaluating it objectively, to determine the extent to which assessment criteria are fulfilled.

25. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS Assessment Levels

26. COPYRIGHT © FIDUCIARY360 1999-2008 YOUR GUIDE TO GLOBAL FIDUCIARY INSIGHTS Benefits of Fiduciary Practices and Certification 1.Provides a benchmark against prudent practices 2.Helps to uncover investment and/or procedural risks 3.Streamlines due diligence 4.Demonstrates leadership and increases the potential for national and worldwide recognition 5.Helps assure that those who rely upon investment fiduciaries for their financial well-being are well served