Fiduciary Analytics Releases Fiduciary Evaluation Tool

November 3, 2003 ( - Fiduciary Analytics has released a fiduciary evaluation tool to determine the suitability of a portfolio of mutual funds for 401(k) plans, smaller foundations and endowments, 529 plans, and private trusts.

The Fiduciary Score uses eight due-diligence screens that represent the suggested minimum process a fiduciary should follow when selecting and/or monitoring a mutual fund. Each of the eight screens is then individually scored and combined to create an overall score for the mutual fund, according to a news release.

Once the overall score is determined, the mutual fund is then ranked against all of the funds within the applicable peer group and assigned one of four rankings:

  • passed -the mutual fund has no known fiduciary shortfalls.
  • acceptable – the mutual fund has fiduciary shortfalls, but still ranks in the top 25% of its peer group.
  • watch – the mutual fund has numerous fiduciary shortfalls, and ranks between the 25 th and 75 th percentile of its peer group. Funds on the “Watch” list would not be considered good candidates in a search, but are not necessarily that bad that they should be replaced if currently used in a portfolio.
  • replace – the mutual fund has significant fiduciary shortfalls, which in total places the fund in the bottom 25% of its peer group.  

Fiduciary Score also has a search engine function allowing users to:

  • evaluate an entire fund family to determine the percentage of funds that have achieved each of the various rankings
  • search across an entire peer group, identifying the funds that have either a “Passed” and/or “Acceptable” rating, and then further limiting the search to funds on a particular brokerage platform, such as mutual funds available through Merrill Lynch or Charles Schwab
  • monitor the mutual funds being used in a particular portfolio – such as the investment options for a 401(k) plan – to quickly access which mutual funds in the portfolio continue to be an appropriate choice, and more importantly, which mutual funds need to be replaced.

Fiduciary Analytics also announced the beta test of a similar Web-based tool that will evaluate separate account managers.   More information is available by contacting J Richard Lynch at (412) 741-8140.