AIF FINAL TEST 2026 QUESTIONS
WITH CORRECT ANSWERS GRADED
A+
◍ What make you a Fiduciary?.
Answer: Being named fiduciary in governing docsProviding personalized
investment advice for compensationExercising investment discretion
Having authority to appoint other fiduciaries
◍ ERISA.
Answer: Type of Plan: Private RetirementOversight: DOL, IRS and Pension
Benefit GuarantyCommon Plans: 401k, Private 403b, Profit Sharing , DB
Plans, SEP & SIMPLE
◍ Standard of Care - Fiduciary.
Answer: 1-Principles and relationship based2-Undivided duty of loyalty to
client: • Avoid or manage conflicts • Greater transparency of
conflicts3-Duty of care of a prudent expert with utmost good faith: • Prudent
expert standard • Advice must be suitable and in clients best interests
◍ Standard of Care - Fair Dealing.
Answer: 1- Rules and transaction-based • Arms-length relationship2 -
Divided loyalty of agent between firm and customer: • Conflicts may exist
unmanaged and undisclosed3 - Deal fairly, consistent with industry
suitability standard: • Suitability standard rapidly evolving
◍ Global Fiduciary Standards of Excellence.
Answer: the investment process FI360 designed to ensure investment
decisions are prudently managed.
◍ Taft-Hartley Act (1947).
Answer: Governed by ERISALabor Unions
,◍ Investment Fiduciary.
Answer: someone who is managing the assets of another person and stands
in a special relationship of trust, confidence, and /or legal responsibility.
◍ UPIA: Uniform Prudent Investor Act.
Answer: Applies to Private TrustsOversight by state Attorney General
◍ UPMIFA: Uniform Prudent Management of Institutional Funds Act.
Answer: Applies to charitable organization, endowments & private or public
foundationsOversight by state Attorney General5% spending
requirements=Modeled Return-inflation-investment expenses
◍ Investment Stewards.
Answer: manage the overall investment decision-making process
◍ MMPERSA: Model Management of Public Employee Retirement Systems
Act.
Answer: Applies to public employee retirement systemsNASRA National
Association of State Retirement Administrators
◍ Investment Advisors.
Answer: professionals who provide comprehensive and continuous advice to
Stewards.
◍ Investment Managers.
Answer: make securities transaction decisions and generally act with
discretion.
◍ How many investment Stewards?.
Answer: more than five million men and women, responsible for managing
more than 80% of the nation's liquid invested assets.
◍ Examples of Stewards.
Answer: individuals who serve as: • trustees; • committee members for
endowments, foundations, and other institutional accounts; • plan sponsors;
or • who occupy similar positions entrusted with managing assets for others.
• stand at the top of the fiduciary pecking order.
, ◍ How many Investment Advisors.
Answer: Approximately 317,000* investment advisors as of 2011
◍ Investment Advisers Act of 1940.
Answer: Administered by SECAnti Fraud PowersFederal law for larger
investment advisers
◍ Duty of Loyalty.
Answer: Best Interest of ClientActing in Good FaithAvoid Conflicts or
manage with client best interest
◍ Examples of Investment Advisors.
Answer: - wealth managers- financial advisors- trust officers- financial
consultants- investment consultants- financial planners
◍ Duty of Care.
Answer: CompetenceAct with care, skill, prudence and diligence of prudent
personDocumentation
◍ Standards of Conduct & Code of Ethics-Pyramid.
Answer: 1st-Personal Standards2nd-Professional Organization
Standards3rd-Employer or Firm Standards4-Federal, State & Self Reg
Organization Laws & Regs
◍ Defining characteristic of Investment Advisors.
Answer: Prudent Experts who give comprehensive and continuous advice
◍ How many Investment Managers.
Answer: There are more than 16,400 investment companies in the U.S
employing
◍ Examples of Investment Managers.
Answer: - mutual fund managers- exchange traded fund (ETFs) managers-
separately managed accounts managers
◍ Trust Documents.
Answer: Check with Legal if:Prohibit certain asset classesRequire Socially
Responsible Investing Relieve Fiduciary to diversify Establish requirement
WITH CORRECT ANSWERS GRADED
A+
◍ What make you a Fiduciary?.
Answer: Being named fiduciary in governing docsProviding personalized
investment advice for compensationExercising investment discretion
Having authority to appoint other fiduciaries
◍ ERISA.
Answer: Type of Plan: Private RetirementOversight: DOL, IRS and Pension
Benefit GuarantyCommon Plans: 401k, Private 403b, Profit Sharing , DB
Plans, SEP & SIMPLE
◍ Standard of Care - Fiduciary.
Answer: 1-Principles and relationship based2-Undivided duty of loyalty to
client: • Avoid or manage conflicts • Greater transparency of
conflicts3-Duty of care of a prudent expert with utmost good faith: • Prudent
expert standard • Advice must be suitable and in clients best interests
◍ Standard of Care - Fair Dealing.
Answer: 1- Rules and transaction-based • Arms-length relationship2 -
Divided loyalty of agent between firm and customer: • Conflicts may exist
unmanaged and undisclosed3 - Deal fairly, consistent with industry
suitability standard: • Suitability standard rapidly evolving
◍ Global Fiduciary Standards of Excellence.
Answer: the investment process FI360 designed to ensure investment
decisions are prudently managed.
◍ Taft-Hartley Act (1947).
Answer: Governed by ERISALabor Unions
,◍ Investment Fiduciary.
Answer: someone who is managing the assets of another person and stands
in a special relationship of trust, confidence, and /or legal responsibility.
◍ UPIA: Uniform Prudent Investor Act.
Answer: Applies to Private TrustsOversight by state Attorney General
◍ UPMIFA: Uniform Prudent Management of Institutional Funds Act.
Answer: Applies to charitable organization, endowments & private or public
foundationsOversight by state Attorney General5% spending
requirements=Modeled Return-inflation-investment expenses
◍ Investment Stewards.
Answer: manage the overall investment decision-making process
◍ MMPERSA: Model Management of Public Employee Retirement Systems
Act.
Answer: Applies to public employee retirement systemsNASRA National
Association of State Retirement Administrators
◍ Investment Advisors.
Answer: professionals who provide comprehensive and continuous advice to
Stewards.
◍ Investment Managers.
Answer: make securities transaction decisions and generally act with
discretion.
◍ How many investment Stewards?.
Answer: more than five million men and women, responsible for managing
more than 80% of the nation's liquid invested assets.
◍ Examples of Stewards.
Answer: individuals who serve as: • trustees; • committee members for
endowments, foundations, and other institutional accounts; • plan sponsors;
or • who occupy similar positions entrusted with managing assets for others.
• stand at the top of the fiduciary pecking order.
, ◍ How many Investment Advisors.
Answer: Approximately 317,000* investment advisors as of 2011
◍ Investment Advisers Act of 1940.
Answer: Administered by SECAnti Fraud PowersFederal law for larger
investment advisers
◍ Duty of Loyalty.
Answer: Best Interest of ClientActing in Good FaithAvoid Conflicts or
manage with client best interest
◍ Examples of Investment Advisors.
Answer: - wealth managers- financial advisors- trust officers- financial
consultants- investment consultants- financial planners
◍ Duty of Care.
Answer: CompetenceAct with care, skill, prudence and diligence of prudent
personDocumentation
◍ Standards of Conduct & Code of Ethics-Pyramid.
Answer: 1st-Personal Standards2nd-Professional Organization
Standards3rd-Employer or Firm Standards4-Federal, State & Self Reg
Organization Laws & Regs
◍ Defining characteristic of Investment Advisors.
Answer: Prudent Experts who give comprehensive and continuous advice
◍ How many Investment Managers.
Answer: There are more than 16,400 investment companies in the U.S
employing
◍ Examples of Investment Managers.
Answer: - mutual fund managers- exchange traded fund (ETFs) managers-
separately managed accounts managers
◍ Trust Documents.
Answer: Check with Legal if:Prohibit certain asset classesRequire Socially
Responsible Investing Relieve Fiduciary to diversify Establish requirement
