PORTFOLIO DIVERSIFICATION TOOLBOX 5.1
Precision Fiduciary Analytics &
THE INSTITUTE FOR PORTFOLIO DIVERSIFICATION
Precision Fiduciary Analytics (PFA), and now THE PORTFOLIO DIVERSIFICATION INSTITUTE (PDI), are solutions-driven fiduciary consulting firms co-founded by Stewart Frank, CPA/PFS, AIFA, and Ben Vernazza, CPA/PFS, TEP (UK) Emeritus.
Co-Founder Frank, the AIPCA’s designated subject matter expert, developed PFA’s analytic methodology while consulting in more than 40 breach of fiduciary duty cases. PDI’s web based user-friendly delivery interface was developed by Co-Founder Vernazza, incorporating his practical knowledge gained over 40 years as an RIA and experience in fiduciary compliance gained while a member of AICPA’s Investment Committee.
PFA provides a low cost interactive suite of diversification management programs that quickly and simultaneously analyze whether a portfolio’s constituent holdings are sufficiently unconcentrated and adequately asymmetric to properly diversify any investment portfolio according the fiduciary diversification standards specified in the Restatement (3rd) Trusts. And if upon learning diversification levels need improvement, the same algorithms are quickly and easily put to use guiding fiduciaries and professional investment advisers through a prudent process that will increase diversification to an acceptable level.
The program and its algorithms are ideal for providing documented scientific analysis for use in legal disputes. It scientifically proves or disproves whether a diversification breach of fiduciary duty has occurred and can be instrumental in convincing a trier of fact. In certain instances It is especially useful for defending ERISA class action claims alleging excessive cost due to use of actively managed funds instead of index funds (contact us if you’d like more information about how this system application works).
The AICPA’s pending adoption of NOCLAR (non compliance with laws and regulations) represents a major change in the standard of care required of CPAs and will be embodied in the AICPA’s Code of Professional Conduct. Post NOCLAR investment portfolios’ audited financial statements will require CPAs to determine whether the portfolios have complied with all laws and regulations, including the fiduciary law governing diversification. The program makes it quick and easy for CPAs, trustees, lawyers, regulators, etc. to comply with this enhanced professional standard.
About Co-Founder Stewart Frank, CPA/PFS, AIFA
PFA’s precision analytic methodology was developed by the company’s founder, Stewart Frank. Frank perfected this methodology while consulting in numerous breaches of fiduciary duty cases over the past twelve years. His dedication to the investigation, analysis, and solving litigant problems led him to develop this system as a means to help trustees, other fiduciaries, and their professional advisers avoid legal disputes over diversification compliance issues.
Stewart is a graduate of the Ross School of Business, University of Michigan and has been a CPA for 57 years. For the past 14 years, he has specialized in the field of Prudent Investor Compliance valuation. During this time, Stewart has provided expert opinions in more than 40 breach of fiduciary cases for both plaintiffs and defendants. He is a recognized expert in fiduciary compliance, having recently contributed content for two handbooks on fiduciary best practices, published by FI360. He also served as a Special Consultant on Fiduciary Matters to the Fiduciary Task Force of the American Institute of CPA’s (AICPA) Personal Financial Planning Executive Committee during their technical review of their handbooks. He is a frequent speaker at meetings of judges, attorneys, CPA’s, trustees, RIAs, stockbrokers, Certified Financial Planners, and not-for- profit board members on the subject of fiduciary compliance. Stewart was also a founding member of the Overseas Oversight Group in 1998 and founded Precision Fiduciary in 2013.
About Co-Founder J. Ben Vernazza, CPA/PFS, TEP (UK) Emeritus
Ben became a CPA in 1961 and was an investment adviser for 40 years. He is a graduate of Stanford University with a BA in Economics and a joint MA from the Stanford Business School and the Food Research Institute where he was coached by his mentor, Professor Dr. Karl Brandt, a member of President Eisenhower’s Council of Economic Advisers. Ben received the Private Sector Initiative Commendation from President Ronald Reagan in 1984.
He was the founder of The Overseas Oversight Group in 1998 that has oversight responsibilities as protector of overseas trusts and companies, as well as starting three other financial advisory organizations. He sold his investment advisory business in 2012 and co-founded PFA with Stewart Frank in 2014.
He served four-year terms on committees of the American Institute of CPAs including the Investment Committee that had oversight over the pension and health plans of the employees of this 350,000 member organization. He is a past chairman of the AICPA special task force on International Tax Reporting Requirements. Prior to these nationwide professional assignments, he participated actively in California CPA Society Committees. Additionally, he served on the asset protection committee of the American Bar Association and as a member of the Probate and Trust Division.