Today, I would like to discuss a term that gets thrown around ad nauseum in the financial services industry, FIDUCIARY. You hear it on TV commercials, read about it in financial publications and possibly get seduced by the term when being approached by a financial services professional. There is even a professional designation being offered.
I believe that the most appropriate place to begin the discussion is with the definition of the word: According to Investopedia: “being a fiduciary requires being bound ethically to act in the other’s best interest.”
So, my question for today is: “Do you feel unequivocally that the relationship you have with your advisor/s meets that definition?
After 26 years in this industry, I am fed up with the fact that rather than being embraced as a truth, it has become a punchline. More a marketing ploy than a sincere effort to provide you with a safe environment with which to explore your financial potential. In my opinion, if it really mattered that much, why then are the proposed FIDUCIARY RULES still bouncing around the halls of government and vehemently resisted by financial services industry lobbyists? Why don’t the financial services industry regulatory authorities have that requirement set in stone for every branch under its supervisory jurisdiction?
In my opinion a true fiduciary should not need a rule or a punchline to fulfill its obligation to the best of their ability and in your best interest. It should be innate and come naturally, and nothing other than action to that effect will do, no matter how you dress it up with words or fancy suits, skyscrapers, and designations. So, if you have a financial services relationship judge it by the actions and results of your financial professional. Did you create a game plan together to reach your financial objectives? Are you both doing your part responsibly to follow through with action? If these plans are off track, is your professional proactive or making excuses? Do they genuinely care about what matters to you or is every call a sales pitch? Does he or she communicate with you the way you wish to be communicated with? What is your gut telling you?
Some of the best professionals I have learned from and worked with never had to use the word FIDUCIARY to attract clients and have a meaningful impact on their clients’ lives, even though they might be classified as such. It is already part of their character. They do not know any other way to be or conduct business. It is simple, in my opinion, that financial advice should not be given under any other intention, but that of being bound ethically to act in the other’s best interest.
So, in conclusion, I ask you again, "Do you feel unequivocally that the relationship you have with your advisor/s meets that definition?"
TC117569(1020)1
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