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and enforces its own code of ethics and standards as is described through its Code of Professional Responsibility (“code”) and Standards of Practice (“standards”).

      The seven elements listed in IMCA's code serve as the core of IMCA's code of ethics. These seven code elements are designed to outline the key principles of IMCA's code. The code elements are listed in IMCA's standards under standard number one. Subsequent standards provide further explanation of code elements along with additional details of specific requirements and guidelines, further application of code elements, and numerous examples. In other words, the standards describe various code items in greater detail.

      The concepts of fiduciary responsibility, disclosure, conflicts of interest, confidentiality, compliance, and competence are all described and explained in the readings found in this chapter.

      Part I IMCA Code of Professional Responsibility

      Learning Objectives

      ■ List and explain the seven elements of IMCA's Code of Professional Responsibility.

      ■ Apply the seven code elements appropriately when given a set of facts or circumstances.

      Part II IMCA Standards of Practice

      Learning Objectives

      ■ Use IMCA's Standards of Practice to provide detailed explanations of the seven elements of IMCA's Code of Professional Responsibility.

      ■ Determine the ramifications based on IMCA's Standards of Practice when given a set of facts or circumstances.

      Part III IMCA Performance Reporting Standards

      Learning Objective

      ■ Differentiate between performance standards that must be observed (are required) and best practices.

      Part IV IMCA Disciplinary Rules and Procedures

      Learning Objectives

      ■ Describe the disciplinary rules and procedures that apply to CIMA^® designees.

      ■ Apply IMCA's disciplinary rules and procedures when given a set of facts or circumstances.

      Part V IMCA Guidelines Regarding the Acceptance of Benefits from Third Parties

      Learning Objectives

      ■ Describe IMCA's guidelines regarding a CIMA^® designee's acceptance of benefits from third parties.

      ■ Describe a CIMA^® designee's responsibilities for disclosing third-party benefits.

      Part I IMCA Code of Professional Responsibility

      This Code has been adopted to promote and maintain a high standard of professional conduct in the investment management consulting profession. All members of IMCA are expected to subscribe to the Code, which serves to ensure public confidence in the integrity and service offered by professional investment management consultants. Adherence to the Code is required of all IMCA designation holders.

      Each financial professional shall:

      1. Serve the financial interests of clients. Each professional shall always place the financial interests of the client first. All recommendations to clients and decisions on behalf of clients shall be solely in the best interest of the client.

      2. Disclose fully to clients services provided and compensation received. All financial relationships, direct or indirect, between consultants and investment managers, plan officials, beneficiaries, sponsors, or any other potential conflicts of interest shall be fully disclosed on a timely basis.

      3. Provide to clients all material information related to the investment decision-making process as well as other information they may need to make informed decisions based on realistic expectations. All client inquiries shall be answered promptly, completely, and truthfully.

      4. Maintain the confidentiality of all information entrusted by the client, to the fullest extent permitted by regulatory and legal entities in conjunction with the professional's firm/company policy.

      5. Comply fully with all statutory and regulatory requirements affecting the delivery of investment consulting services to clients.

      6. Maintain competency in investment management consulting and financial services through education and training to better serve clients and enhance investment management consulting.

      7. Maintain a high level of professional ethical conduct.

      Part II IMCA Standards of Practice

      Standard 1: The IMCA Code of Professional Responsibility

      See the IMCA Code of Professional Responsibility on previous page.

      Standard 2: Responsibilities to the Client

      STANDARD 2A – A CONSULTANT'S RESPONSIBILITY TO ASSIST IN ACHIEVEMENT OF CLIENT'S FINANCIAL GOALS

      Consultants have a responsibility to make the client's financial goals their highest priority. All recommendations must be made solely in the client's interests and intended to assist clients in reaching their financial goals.

      Explanation

      Each client, whether institutional or individual, must have full confidence that the consultant will make objective, well-researched recommendations based on the client's goals and best interests.

      Procedures for Compliance

      All consultants shall notify clients of their intent to provide unbiased, candid, informed recommendations intended solely to assist clients in reaching their financial goals and to promote the clients' best interests.

      First and foremost, in order to determine the client's goals, the consultant shall profile each client to determine rate-of-return objectives, risk tolerance, time horizons, and tax status. Initial and ongoing recommendations shall be based upon the client's goals, both as originally determined and as they change over time. When conflicts or the potential for conflicts arise, the client must be fully advised of the situation. Without full disclosure of the consultant's role or the firm's role in any potential conflict of interest, the client's best interests may be compromised.

      In addition to the IMCA Standards of Practice (Standards) and IMCA Code of Professional Responsibility (Code), consultants shall adhere to the firm's code of conduct and compliance. If at any time consultants believe that they cannot comply with these standards, they should resign the contract with the client.

      Impact of the Standard

      The professional responsibility implied by this standard is the very basis for clients engaging a consultant on their behalf. Continual understanding, conveyance, and adherence to this standard enhance the stature of the client/consultant relationship and that of the investment consulting profession. Without compliance, trust – the most important aspect of the client/consultant relationship – cannot exist, and the balance of these standards becomes irrelevant.

      STANDARD 2B – A CONSULTANT'S RESPONSIBILITY TO DISCLOSE ALL COMPENSATION

      Consultants have a responsibility to disclose to clients all compensation in all forms and amounts received for consulting services provided.

      Explanation

      Client knowledge of compensation received for services rendered by the consultant establishes a relationship of trust between the parties. The disclosure of compensation as well as disclosure of any financial relationships between the consultant and service providers builds an ethical bridge in the relationship. Disclosure of all compensation, and the sources of such compensation, also eliminates the potential for conflicts of interest between the client and consultant.

      Procedures for Compliance

      Consultants shall annually review all compensation received for consulting services rendered and report to the client any additional compensation beyond that which the client may reasonably be expected

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