Toronto-based Richardson GMP Ltd. wants to ensure that people know its processes and portfolio managers are held to a higher standard, now that the firm has received certification for fiduciary excellence – the first financial services firm in Canada to do so.
The certification, received this past December from the Centre for Fiduciary Excellence (CEFEX) in Toronto, applies to Richardson GMP’s managed-accounts business.
Applying for, and receiving, the certification was a way for the firm to show its portfolio managers and clients that it is serious about following a high standard in wealth management, says Andrew Marsh, president and CEO of Richardson GMP: “It’s important for a firm to walk the talk in terms of its values. And our advisors recognize that they’re at a firm that walks the talk.”
To be certified, Richardson GMP had to go through an assessment of its business by a CEFEX-accredited investment fiduciary analyst. The process, says Carlos Panksep, CEFEX’s managing director, starts with the analyst requesting documents and information from the firm, then following up with an on-site visit. The analyst then makes recommendations to the firm to bring its operations up to standard. Next, the analyst creates a report based on the information provided during the assessment and submits it to CEFEX for approval.
Once certified, a firm must go through an annual review to ensure its operations and procedures remain up to standard. The initial assessment is done for a flat fee of $5,000-$15,000, says Panksep, while annual review costs less because it takes less time.
Although CEFEX can certify an entire investment firm, says Panksep, its parent company, fi360 Inc. in Pittsburgh, Penn., offers courses for individual designations, such as the accredited investment fiduciary analyst (AIFA). Portfolio managers with Richardson GMP, Marsh says, will have the option to apply for the AIFA designation.
Applying for the certification in fiduciary excellence has been on the radar for Richardson GMP Marsh says, since before the merger that created the firm. In fact, a year before the merger between Richardson Partners Financial Ltd. and GMP Private Client LP in 2009, GMP was in the process of achieving the certification. After the merger, the combined firm had to go through the process once again.
Richardson GMP’s decision to pursue this certification is a reflection of the growing trend for financial services firms and their employed professionals to take on more responsibility, says John Platt, managing director with Oakville, Ont.-based HighView Financial Group, who earned his AIFA from fi360 four years ago.
“Even those [financial advisors] who are in the advice business [and who] are working on a non-discretionary basis,” says Platt, “I think their clients do see them having some fiduciary responsibility. “
For Marsh, moving toward a defined fiduciary responsibility to clients is a way for the financial services industry to redeem itself after the crisis of 2008: “It’s time that our profession stands up to say, ‘We don’t mind being held to higher standards’.”
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