So I looked up the definition of “fiduciary” online. Even though the interpretations of a fiduciary can vary amongst different professional engagements, it is fair to state that a fiduciary must legally put your interests before their own. The “fiduciary standard” is extremely important in the world of financial and legal activities, not the least of which includes those with investment brokers, financial planners or similar titles.
You may be surprised to learn that your own financial representative MAY NOT BE a fiduciary….Not kidding!
So you may be working with a person or firm that has no legal requirement to put your needs and objectives first. Let’s compare that to a different relationship. What if you went to buy a new, big-screen television. And let’s say that one store only employed fiduciary salespeople who were legally required to provide disclosures and all the pro’s and con’s to help you make the best decisions. Contrarily, the other competing store didn’t require a fiduciary duty…which store are you going to? Now I understand that a financial relationship is not identical to buying a TV, but I do stress the expectation of absolute trust and objectivity one must have in financial engagements…that person who always acts as if they were doing things for themselves. And over the past decade or so, many industry lobbying firms have rigorously fought to prevent the imposition of a uniform fiduciary standard….I’ll let you ponder over that one.
So, maybe a good question to ask a current or potential financial adviser is “are YOU a fiduciary?”