A fiduciary is a term that may be a little baffling to those looking for a financial advisor. What exactly does being a fiduciary entail and what is fiduciary consulting? Fiduciary seems like a convoluted term, but the basic premise is quite simple. A financial advisor who operates under the fiduciary standard is required to put the best interest of their client first.
At Precision Financial Services, we ensure that any advisor you work with is working to the fiduciary standard. We are entrusted with protecting and managing the wealth of their client and do so in good faith and loyalty.
The Fiduciary Standard was established in 1940 as a part of the Investment Advisors Act and it is monumental. This standard includes the provision that advisors must provide sound and accurate financial advice that is free from actual or potential conflicts of interests to their clients. As financial advisors, working under this standard heightens our ethical and legal responsibility when taking on the fiduciary duty of someone’s assets. Most often, a fiduciary relationship consists of a trustee and a beneficiary.
Fiduciary consulting is a type of asset management where the owner, or beneficiary, of said assets, appoints a third-party, the trustee, to manage the totality of their assets. The third-party will then control the assets on behalf of the owner in an effort to achieve the owner’s goals. These situations require trust, good faith and honesty and fiduciaries are the only advisors equipped to fulfill those requirements.
It is important to note that not all financial advisors are considered fiduciaries. When looking for a financial advisor, it is essential to ask if they are held to the fiduciary or suitability standard. Then you will be able to make sure that you are choosing the advisor who is working to this standard. The suitability standard does not require an advisor to work in the clients best interest but is required to provide advice that would be suitable for the client. The suitability standard is in contrast to the fiduciary standard that holds advisors to a duty of loyalty, care and a higher level of disclosure.
Fiduciary consulting helps provide you with an integrated fiduciary management plan. This type of advisor will walk along with you as they help you set an appropriate investment strategy, manage your portfolio, implement the portfolio, and continuously monitor it for changes that would benefit your interests. A fiduciary will provide you with the highest standard of care and will always work towards your best interest even if it is not in their best interest.
As you are looking for fiduciary advisors, give us at Precision Financial Services a call and we can ensure that you will be able to talk to a fiduciary. You can be sure that we will go above and beyond understanding your financial situation before any recommendations are made. And from there, our recommendations will always be made in your best interest. Doing what is right for you – the client – is what being a fiduciary is all about.