Broker Check

What is a Fiduciary?

fi•du•ci•ar•y – A financial advisor held to a Fiduciary Standard occupies a position of special trust and confidence when working with a client. As a Fiduciary, the financial advisor is required to act with undivided loyalty to the client. This includes disclosure of how the financial advisor is to be compensated and any corresponding conflicts of interest.

A fiduciary is a person or firm that has a legal responsibility to put the interest of their clients ahead of their own.  A physician, an attorney and a CPA are held to this standard.  Why not your financial advisor?

Is your broker or advisor working for you?

Federal and state law requires that Registered Investment Advisors are held to a Fiduciary Standard. This law requires that an advisor act solely in the best interest of the client, even if that interest is in conflict with the advisor’s financial interest. Investment Advisors must disclose any conflict, or potential conflict, to the client prior to and throughout a business engagement. Investment Advisors must adopt a Code of Ethics and fully disclose how they are compensated.

Unfortunately, only a small proportion of "financial advisors" are federally or state-registered Investment Advisors. Most so-called financial advisors are considered "Broker-Dealers" by the United States Securities and Exchange Commission (SEC). They are held to a lower standard of diligence on behalf of their clients. In fact, they are required by federal law to act in the best interest of their employer, not in the best interest of their clients.