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What It Means for an Advisor to Be CEFEX-Certified 


Choosing a financial advisor isn’t easy. You’ll need to determine if you need an in-person financial advisor or a robo-advisor. Then you’ll choose a firm. It may be one close to home or with a certain area of expertise. Once you pick, check their credentials. If an advisory firm says it’s CEFEX-certified, it’s certified by the Centre for Fiduciary Excellence and is subject to audits. Here’s what that means for you and your investments.

CEFEX Certification Explained

The Centre for Fiduciary Excellence is an independent organization that assesses, audits, and certified financial companies, advisors, and managers. The organization is based in Pittsburgh, Pa., but they adhere to global standards. 

If a firm is CEFEX-certified, it means they follow what’s called a Global Fiduciary Standard of Excellence. In short, it means they have a responsibility to act in your best interest if you’re an investor with their firm. The must also undergo annual audits conducted by a third-party fiduciary, and must maintain a certain level of professionalism. Those audits cost between $5,000 and $20,000, depending on the size of the firm.

A CEFEX-certified advisory firm also may have lower fees. It also will keep an eye on potential conflicts of interest for advisors. 

What a CEFEX Certification Means 

What does it mean for an advisor to be CEFEX-certified?

There are organizations that oversee financial advisors and various certifications one might acquire. However, there isn’t a universal standard in the U.S. that guides all financial professionals. 

A CEFEX certification is one way to determine that your advisor operates by a certain set of standards. If a firm is CEFEX-certified, it means they follow what’s called a Global Fiduciary Standard of Excellence. This means they are required to act in investors’ best interests.

They also agree to annual audits conducted by independent agencies. Those audits ensure that they are operated by the aforementioned standards. The audits also make certain that a firm is meeting certain financial requirements. Audits act as supplemental performance review of sorts to the reviews and examinations performed by regulatory bodies like the Securities and Exchange Commission (SEC)

CEFEX-certified firms are required to put investors’ interests first. That has some financial benefits, including fees that can be lower than those of other advisors. It also means those firms are looking out for conflicts of interest among advisors. Those may include compensation-based conflicts, portfolio management conflicts, or potential affiliations between advisors and broker-dealers. 

These firms are also required to maintain high levels of professionalism. Advisors in CEFEX-certified firms are required to keep abreast of the latest industry standards and best practices. 

How to Find CEFEX-Certified Advisors

A full list of certified advisors can be found on the CEFEX website. Your advisor, if certified, may also display the CEFEX badge on their website. Click on the badge and it should display the firm’s certificate of registration. 

CEFEX also maintains lists of certified investment stewards, investment managers, recordkeepers, and third-party administrators. An advisor working with a CEFEX-certified firm is deemed by CEFEX to work with a trustworthy organization dedicated to their clients’ best interests. They’re tasked with finding clients the right products at a fair price.

Investment stewards at those firms, meanwhile, are obliged to conduct due diligence and oversee the providers they hire. Such ‘diligence ready’ firms are assessed on an annual basis by an independent fiduciary expert.

The Bottom Line

What does it mean for an advisor to be CEFEX-certified? 

While a CEFEX certification is definitely a positive mark for an advisor, it’s not a fail-safe. Even if your advisor is CEFEX-certified, it’s still wise to do some basic research.

Ensure any potential financial advisor has his or her certified financial planner (CFP) designation. You may also want to make sure they have no complaints filed against them with the Financial Industry Regulatory Authority (FINRA). On the more basic human level, be sure that they listen and are receptive to your financial goals and concerns, and seem committed to helping you reach your financial goals. 

It takes time and patience to wade through the alphabet soup of certifications in the financial sector. However, you may be rewarded for your efforts by an advisor who’ll not only help grow your investments, but will do so inexpensively and with your needs in mind.

Financial Advisor Tips

  • If a CEFEX-certified financial advisor sounds like a good fit for your portfolio, it may be time to start the search. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
  • Do you need a financial advisor? When do you need one most? If you think you might be in need of some assistance, but aren’t quite ready to bring in a financial professional, SmartAsset can show you how to find and choose a financial advisor without making a commitment.

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