How do you know if your financial advisor is a fiduciary?

How do you know if your financial advisor is a fiduciary?

July 09, 2021

All across the United States, things are changing and normalizing.

I don’t know about you I am very excited about getting back to “normal.” I received my Vaccine, my first Pfizer shot. I was so relieved I felt like a ton of bricks had been lifted off my shoulders.  Then after two weeks or so, I received my second, Well I cannot explain the relief I felt.  I took a big breath and just let it go.

I have not been sick for one year and two months at all: no colds, sore throats, or sniffles. I am not sure that the mask will be worn forever or be part of my wardrobe from now. I do know that precautions will still be taken by many.  We still be sanitizing, having flu shots, etc. These are things that protect us.

Fiduciary protection

As a financial advisor, my job is to protect you.

As a fiduciary my job is defined as a person or organization acting on behalf of another person or persons, putting clients' interest ahead of my own, with a duty to preserve good faith and trust. I believe that getting the COVID vaccine and wearing a mask, is an extension of the fiduciary responsibility to you and to all my fellow humans.

Fiduciary relationship

fiduciary relationship is defined as “a relationship in which one person is under a duty to act for the benefit of the other on the matters within the scope of the relationship.” “Fiduciary relationship usually arises in one of the four situations:  (1) when one person places trust in the faithful integrity of another, who as a result gains superiority or influence over the first, (2) when one person assumes control and responsibility over another, (3) when one person has a duty to act or give advice to another on matters falling within the scope of the relationship, or (4) when there is specific relationship that has traditionally been recognized as involving fiduciary duties, as with a lawyer and a client, or a stockbroker and a customer.” (Investopedia)

When I have a fiduciary duty to someone else, I must as my duty, act in a way that will benefit someone else, usually financially. As the person who has a fiduciary duty is called the fiduciary, the person to whom the duty is owed is called the principal or the beneficiary.

How do I know if my financial advisor is a fiduciary?

Most Certified Financial Planner™ professionals are fiduciaries because this is part of the oath one takes upon certification. The best way to know if your advisor is a fiduciary is to ask them! Have them put it in writing that they are acting in your best interest.

Code of ethics for CFP®

  1. Act with honesty, integrity, competence, and diligence.
  2. Act in the client’s best interests.
  3. Exercise due care.
  4. Avoid or disclose and manage conflicts of interest.
  5. Maintain the confidentiality and protect the privacy of client information.
  6. Act in a manner that reflects positively on the financial planning profession and CFP® certification.

 

For complete information check https://www.cfp.net/ethics/code-of-ethics-and-standards-of-conduct

As an Enrolled Agent and a Certified Financial Planner™ professional, I am a fiduciary committed to you and have a duty to act in a way that will benefit you and your family. 

Book a Call today and let’s discuss your options.

Lillian Meyers CFP®, CDFA®, EA is a financial planner in Sonoma, California helping clients live their best life through the use of financial planning, investment management, and other sophisticated financial options.