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Improve the quality of investment advice: a volume of recommended practices shows CPAs how to deliver competent and objective financial tips.

Article Excerpt
The vast majority of the nation's investable wealth is in the hands of fiduciaries--more than five million men and women responsible for managing others' money. While corporate malfeasance has cost shareholders billions in losses, such damage may be far smaller than that resulting from investment advisers' and trustees' failure to competently manage client and trust assets.

In response, the Foundation for Fiduciary Studies and the AICPA have published Prudent Investment Practices--a handbook for investment fiduciaries--which contains a conceptual framework for following a disciplined investment process. To introduce the handbook to members and help them use it effectively, the AICPA has added explanatory sessions to this month's Personal Financial Planning Technical Conference and the 2004 Practitioners' Symposium in June. The aim in these efforts is to protect the average investor's interests and to promote the delivery of competent and objective investment advice.

This article explains how fiduciaries can implement the guide's best practices and avoid making investment decisions influenced by emotion or irrelevant market factors.

CPAs, who often are themselves fiduciaries or act as advisers to fiduciaries and others, will find the handbook useful in determining whether an investment process corresponds with defined prudent practices. It also will help practitioners understand which new investment strategies, products and techniques fit their clients' priorities.

RESPONDING TO VARIED NEEDS

The handbook contains practical advice for CPAs who

* Work in business and industry, supervising or advising investment committees. It describes the roles and responsibilities of investment committee members. CPAs can use this information as a checklist for reviewing the committee's investment decision-making process and identifying any deficiencies in it.

* Prepare financial statements for--or serve as a business consultant to--foundations, endowments or high-net-worth individuals. The handbook is particularly useful to these practitioners because it defines the specific functions an investment adviser should...

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