In the news, the word “fiduciary” is thrown around a lot in regards to financial advisors and their duties. The concept can seem confusing, as many people assume that all advisors, whether they’re stockbrokers or financial planners, are required to act in their client’s best interest. But that’s not the reality. It’s important to understand the distinction between different types of advisors’ roles and what it means for you and your money.
What Does a Fiduciary Do?
The primary role of a fiduciary is to put your needs first and to provide advice and recommendations that will benefit you. Think of a fiduciary like a trustee. They’re a professional who is given and accepts the responsibility of managing assets for someone else. This duty protects you from conflicts of interest and biased advice.
For example, fiduciary duty prevents an advisor from making a particular investment with your money solely because it pays him or her a large commission, instead of taking your best interests into account. For those who don’t adhere to a fiduciary standard, a recommendation made by advisors only has to be “suitable.” The problem with this is that some advisors could then sell high-fee products, even if a lower-priced option was just as suitable or available, in order to receive a higher commission.
The fiduciary standard includes providing objective guidance that is in your best interest and fully disclosing all fees. The fiduciary standard can give you confidence that your hard-earned money is in good hands.
How Do I Know Who is a Fiduciary?
While some advisors may toss around the term lightly, not all advisors are fiduciaries. Brokers and insurance agents acting on the other party's behalf are not required to serve in a fiduciary manner. As they represent themselves or their company, they are only required to provide you with “suitable” financial products, rather than those recommended based on your individual circumstances.
Wall Street brokerage firms can sell proprietary products, so their advice may potentially still be biased. Annuities and other high-fee investments that provide brokers a higher commission can still be sold into your retirement account. Additionally, while brokers must inform clients that they’re choosing to be paid commissions, if the investor neglects to read the disclosures, they won’t know where their broker’s interests lie.
As an independent advisor, CERTIFIED FINANCIAL PLANNER™ professional, and founder of a fee-only financial planning firm, I am committed to helping you reach your goals. My approach to investing and wealth management is founded upon the highest fiduciary standards, and my independence serves as a basis to create a specific strategy tailored to meet your financial goals. My advice is driven by one concern alone – the best interest of my clients.
I am dedicated to providing you with the best advice I can give without any conflicts of interest. I act with undivided loyalty to you and provide complete transparency and disclosure when it comes to my compensation or investment approach.
Why Should I Work with a Fiduciary?
There are several benefits to working with an advisor who serves in a fiduciary capacity. For one, they are open and transparent. Aside from the obvious goal of maximizing value for your money, working with a fiduciary will give you confidence that your advisor is working in your best interests rather than their own.
By working with an advisor who upholds fiduciary standards, you can feel more empowered to make the best decisions for you and your finances. Clients have the power to ask questions and to demand the highest value for the service that advisors are providing.
I understand people’s reservations or even negative connotations towards the underlying motivations of some advisors. I want to assure you that you can trust in the fact that my relationship with you is built on integrity. I take pride in my firm’s fee-only compensation structure, as it helps our clients feel confident that we are serving their needs first, last, and always.
Learn About Our Fiduciary Approach
It’s important to thoroughly research an advisor before choosing to work with him or her. An advisor should be open to sharing with you their business philosophy, how they choose investments, what their process looks like, any potential conflicts of interest they face, and how they’re paid.
I take pride in my transparency and objectivity. If you’re unsure about your current financial strategies, haven’t reevaluated your investments in several years, or are just interested in learning more about what it means to work with a fiduciary, I am happy to offer you a complimentary consultation. Reach out to me by calling (239) 204-4333, or email me at firstname.lastname@example.org.
Scott R. Schatzle, CFP® is a financial advisor and the owner of Mutual Trust Advisory Group, an independent, fee-only financial planning firm that specializes in helping successful individuals, families, and retirees. Scott brings more than 13 years of industry experience to the table, along with specialized training in and knowledge of comprehensive financial planning. Working closely with each of his clients, he strives to assist people in making smart decisions around their money and help them build and maintain wealth over time. Based in Estero, Florida, he works with clients in Estero, Bonita Springs, Fort Myers, and Naples. To learn more about Scott and his firm’s services, call (239) 204-4333, email email@example.com, or connect with him on LinkedIn.
Mutual Trust Advisory Group is registered as an investment advisor with the state of Florida and only conducts business in states where it is properly registered or is excluded from registration requirements. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability.
All investments and strategies have the potential for profit or loss. There are no assurances that a client’s portfolio will match or exceed any particular benchmark.
This newsletter has been provided by Claire Akin of Indigo Marketing Agency for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy any security. All expressions of opinion reflect the opinions of Claire Akin of Indigo Marketing Agency and not necessarily those of Mutual Trust Advisory Group.