Farm Mnemonics

Question 1

Q1: 4-step fiduciary process?

Answer 1

A1: OFIM (pronounced “Oh-Fim”). O=Organize, F=Formalize, I=Implement, M=Monitor.

Question 2

Q2: 8 Global Fiduciary Precepts.

Answer 2

A2: “Kids Demand Pizza Until Cats Are Milked Loudly.” Each initial = Know, Diversify, Prepare IPS, Use experts, Control fees, Avoid conflicts, Monitor, Loyalty/care.

Question 3

Q3: 5 functions in the NIST Cybersecurity Framework?

Answer 3

A3: “I Play Drums Really Rad.” I=Identify, P=Protect, D=Detect, R=Respond, R=Recover.

Question 4

Q5: 4 main ERISA Safe Harbors?

Answer 4

A5: “C-Q-5-E.” C=404(c), Q=QDIA, 5=405(c), E=EIAA.

Question 5

Q6: conflict of interest management steps under fiduciary duty?

Answer 5

A6: “D² + M” = Disclose, Document, and Manage any material conflicts.

Question 6

Q7: ‘retain or replace’ decision when a fund is on the watch list?

Answer 6

A7: “FLAG IT, CHECK IT, DECIDE IT.” Flag=Watch, Check=Investigate, Decide=Retain/Replace.

Question 7

Q8: For selecting/renewing service providers

Answer 7

A8: “C-E-D.” Compare multiple providers, Evaluate fees & quality, Document the final decision.

Question 8

Q9: key IPS content?

Answer 8

A9: “RRAM.” R=Roles/Responsibilities, R=Risk/Return, A=Asset Allocation, M=Monitoring/Rebalancing.

Question 9

Q10: core investment metrics?

Answer 9

A10: “Some Bulls Are Speedy.” S=Std Dev, B=Beta, A=Alpha, S=Sharpe Ratio.

Question 10

Q12: 3(16), 3(21), and 3(38) roles under ERISA?

Answer 10

A12: “16 Admin, 21 Advice, 38 All Discretion.” 3(16)=Admin, 3(21)=Advice, 3(38)=Full authority.

Question 11

404(c) vs 408(b)(2)

Answer 11

Here’s an easy way to remember 408(b)(2) and 404(c) with simple mnemonics:

408(b)(2) → “B for Bill” (Fees & Bills)
• Think “B” in 408(b)(2) stands for Bill → It’s about fees and compensation disclosures.
• Service providers must show their bill (fees) to plan sponsors.
• Plan sponsors must check if the bill is reasonable.

👉 408(b)(2) = Fee Transparency Rule (Service providers → Plan sponsors)

404(c) → “C for Choice” (Investment Control)
• Think “C” in 404(c) stands for Choice → It’s about participant investment control.
• If participants have choice, fiduciaries aren’t liable for bad investment decisions.
• Employers must provide enough investment options & information to qualify for protection.

👉 404(c) = Investment Control Rule (Plan sponsors → Participants)

Quick Summary Mnemonic:

“Plan sponsors must check the bill (408b2) but let participants make their own investment choices (404c).”

Question 12

Mnemonic for Qualitative Factors

Answer 12

STAR” — S = Staff Turnover, T = Trouble with Regulators, A = Attitude of Service (quality), R = Responsiveness.

Question 13

Mnemonic for what’s in vs. out of an Expense Ratio

Answer 13

“M12A in, TCS out.” M12A = Management fees, 12b-1 fees, Admin fees (included); TCS = Trading costs, Commissions, Spreads (excluded)