What is a Fiduciary?
There are two main standards when it comes to financial advisors, or financial representatives in the industry, and those are the suitability standard, and the fiduciary standard.
The Suitability Standard
The suitability standard requires advisers to make investment recommendations that are suitable based on a client's age, financial goals and risk tolerance. This is common within large wire houses whom we are all familiar with. The other standard, fiduciary, requires financial advisors to act as fiduciaries, which means they are legally and ethically bound to act in their clients' best interests.
I want to preface that just because someone may be bound by the suitability standard does not mean that they are a “bad” advisor or representative. In fact, I have met and know a number of excellent financial representatives that do wonderful things for their clients, all while maintaining the suitability standard.
The Fiduciary Standard
The fiduciary standard, as I pointed out, means that the clients’ best interests are first and foremost. Beyond that, it also requires complete transparency which means you will not be surprised by anything in the way of fees or expenses. Additionally, fiduciaries must disclose any conflicts of interest and must act with undivided loyalty to their clients.
What is the right choice for you?
Every individual’s situation is as unique as a fingerprint, and what may make sense in one situation may have no business being in another. In my experience, for those that have a good handle on their financial plan, and simply need someone to execute trades on their behalf, or manage a portfolio within their risk tolerance, working with someone bound by the suitability standard could be a good fit.
For those that do not enjoy all of the aspects of a financial plan, tracking markets, or may even be overwhelmed at where to start, working with a fiduciary could be the right fit. A client once shared in a meeting: “If I were your mother, what advice would you give me?” This resonated with me for a number of reasons. One, without articulating it, this was and is how I approach every meeting with a client. If this person were family, what advice would be given? It was a fantastic, and specific “reminder” of how I should be approaching these discussions, and what the client is expecting of me.
Why we choose to be Fiduciaries
The fiduciary responsibility has always aligned well from a personality perspective, in that, the “golden rule” has and continues to be a guide in how to live life. It’s simple, treat people how you want to be treated. Being from and in the community, our firm, Silver State Wealth Management, is determined to uphold the fiduciary standard and have a positive influence on those that comprise this wonderful community. If you are interested in having a conversation with a fiduciary financial advisor, we would love to see how we can be of some help.
If you are seeking an experienced, local and fiduciary advisor, we would love to have a conversation to see how we can help you achieve your financial goals.
This is being provided for informational purposes only and should not be construed as a recommendation to buy or sell any specific securities. Past performance is no guarantee of future results, and all investing involves risk. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. The views expressed are those of Jeff Martin and do not necessarily reflect the views of Mutual Advisors, LLC, or any of its affiliates. Investment advisory services offered through Mutual Advisors, LLC, DBA Silver State Wealth Management, an SEC registered investment adviser.
