Standards of Practice

I. PROFESSIONALISM

[1] Knowledge of the law. Designees must understand and comply with all applicable laws, rules, and regulations of any government, regulatory organization, licensing agency, or professional association governing their professional activities, including the Institute of Business & Finance (IBF). In the event of conflict, designees must comply with the more strict law, rule, or regulation; designees must not knowingly participate or assist in any violation of such.

[2] Independence and Objectivity. Designees must use reasonable judgment and care to achieve and maintain independence and objectivity in their professional activities. Designees must not offer, solicit, or accept any gift, benefit, compensation, or consideration that reasonably could be expected to compromise their own or another's independence and objectivity.

[3] Misrepresentation. Designees must not knowingly make misrepresentations relating to analysis, recommendations, implementation or other professional activities.

[4] Misconduct. Designees must not engage in any professional conduct involving dishonesty or deceit or commit any act that reflects adversely on their professional reputation, integrity, or competence.

II. DUTIES TO CLIENTS

[1] Loyalty, Prudence, and Care. Designees have a duty of loyalty to their clients and must act with reasonable care and exercise prudent judgment. Designees must act for the benefit of their clients and place their clients' interests before their employer's own interests. In relationships with clients, designees must determine the applicable fiduciary duty and must comply with such duty to persons and interests to whom it is owed.

[2] Fair Dealing. Designees must deal fairly and objectively with all clients when providing analysis, making recommendations, taking action, or engaging in other professional activities.

[3] Suitability. When designees are in an advisory relationship with a client or prospect, they must:

  • Make a reasonable inquiry into a client's or prospect's investment experience, risk and return objectives, financial constraints prior to making any recommendation or taking action, and must regularly reassess and update this information.
  • Determine that an investment is suitable to the client's financial situation and consistent with the client's written objectives, mandates, and constraints before making a recommendation or taking action.
  • Judge suitability in the context of the client's total portfolio.
  • When designees are responsible for managing a portfolio that encompasses a specific mandate, strategy, or style, they must only make recommendations or take actions that are consistent with the stated objectives and constraints of the portfolio.

[4] Performance Presentation. When communicating performance information, designees must make reasonable efforts to ensure that it is fair, accurate, and complete.

[5] Preservation of Confidentiality. Designees must keep information about current, former, and prospective clients confidential unless:

  • The information concerns illegal activities.
  • Disclosure is required by law.
  • The client or prospect permits disclosure of the information.

III. DUTIES TO EMPLOYERS

[1] Loyalty. In matters related to their employment, designees must act for the benefit of their employer and not deprive their employer of the advantage of their skills and abilities, divulge confidential information, or otherwise cause harm to their employer.

[2] Responsibilities of Supervisors. Designees must make reasonable efforts to detect and prevent violations of applicable laws, rules, regulations, IBF Code of Ethics, and IBF Standards of Practice by anyone subject to their supervision or authority.

IV. ANALYSIS, RECOMMENDATIONS, AND ACTION

[1] Diligence and Reasonable Basis – Designees must:

  • Exercise diligence, independence, and thoroughness in analysis, making recommendations, and taking actions.
  • Have a reasonable and adequate basis, supported by appropriate research and investigation, for any analysis, action, or recommendation.

[2] Communication with Clients and Prospects – Designees must:

  • Disclose to clients and prospects the basic format and general principles of the processes used to analyze, select, and construct portfolios and must promptly disclose any changes that might materially affect those processes.
  • Use reasonable judgment in identifying factors important to their analyses, recommendations, or actions and include those factors in communications with clients and prospective clients.
  • Distinguish between fact and opinion in the presentation of investment and/or insurance analysis and recommendations.
  • Designees must maintain appropriate records to support their analysis, recommendations, actions, and other communications with clients and prospects.

V. CONFLICTS OF INTEREST

Designees must make full and fair disclosure of all matters that could reasonably be expected to impair their independence and objectivity or interfere with respective duties to their clients, prospective clients, and employer. Designees must ensure that such disclosures are prominent, are delivered in plain language, and communicate the relevant information effectively.

VI. DESIGNEE AND STUDENT RESPONSIBILITIES

Designees and students must not engage in any conduct that compromises the reputation or integrity of IBF or the IBF designations. When referring to IBF, its designations, or program candidacies, designees and students must not misrepresent or exaggerate the meaning or implications of being an IBF designee, graduate, or student.