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Understanding the Benefit of a Fiduciary Advisor
To truly weigh the benefit that a fiduciary partnership would have for you, you must ask yourself the following question: What type of relationship would I like to have with the individual I entrust with the care of my wealth?
The true benefit of working with a fiduciary advisor is in the solidity of their working partnerships with their clients. A fiduciary partnership is one based on ethical responsibility to protecting their client’s best interests. This standard of professional relationship is a requirement rather than an ideal. In a published code of ethics, the Certified Financial Planner (CFP) Board of Standards guarantees, by law, a fiduciary’s ethical and responsible treatment of clients.
The roles and obligations of a fiduciary are clearly defined. It is in your best interest to investigate whether the service being provided to you meets these fiduciary standards. A 2009 report by Rand Corp shows that “63% of investors think brokers are legally required to act in the best interest of the client [and] 70% believe that brokers must disclose any conflicts of interest.” It is best to keep in mind that only fiduciaries are “…legally required to act in the best interest of the client.”
The following people are considered fiduciaries:
•Registered Investment Advisors
•Including CFP and AIF designated advisors
•Investment Advisor Representatives
•Real Estate Agents acting on your behalf
To truly weigh the benefit that a fiduciary partnership would have for you, you must ask yourself the following question:
What type of relationship would I like to have with the individual I entrust with the care of my wealth?
One with a foundation of trust backed by a legal obligation to protecting my best interest or one based on the completion of a transaction with no legal standards or regulations?
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