Fiduciary Financial Advisors

Fiduciary Financial Advisors

Is your financial advisor a fiduciary?

A fiduciary is a person who holds a position of trust.

Who holds a more important position of trust than a financial advisor who will influence or control the investment of your retirement assets?

Two Ethical Standards

There are two ethical standards in the financial service industry.

Financial advisors are fiduciaries who are held to higher ethical standards. They are required to put your financial interests ahead of their own.

Salesmen, who are not fiduciaries, are held to lower ethical standards. They are supposed to make suitable investment recommendations, but there is no requirement to put your interests first.

Make sure you select a financial advisor who is a fiduciary.

Who is a Fiduciary?

Financial firms and professionals who are fiduciaries have the following characteristics. They are:

  • Registered Investment Advisors (firms)
  • Investment Advisor Representatives (professionals)
  • Compensated with fees
  • Allowed to provide advice and ongoing services
Who is not a Fiduciary?

Financial firms and professionals who are not fiduciaries have the following characteristics:

  • Licensed to sell investment products
  • Compensated with commissions
  • Not registered to provide financial advice and services for fees
  • Licensed with broker/dealers
Wall Street

You may be wondering why every financial advisor is not a fiduciary. Wall Street has been fighting fiduciary standards for hundreds of thousands of stockbrokers to avoid the increased liability of a higher ethical standard. Wall Street makes more money when it can put its financial interests first.

Two Simple Rules

Want to protect your financial interests? Do not sign any documents until your advisor acknowledges, in writing, he is acting in a fiduciary capacity when he provides financial advice and services for fees.

The Hybrid

There are also hybrid advisors who do both - that is, they act in fiduciary and non-fiduciary capacities when they sell financial advice, services, and products.

They are financial fiduciaries when they provide financial advice and services for fees. They are not financial fiduciaries when they sell financial products for a commission.

You will have to make sure you are dealing with the fiduciary side of the advisor's business model.

Currently seeking a top quality
financial advisor?

Our FREE match service finds the best advisors for you. Start your search today.