How Important is it that My Financial Professional have a Fiduciary Responsibility to Put My Interests First?

financial professionalFI • DU • CI • AR • Y

Definition: A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets for the benefit of the other person, rather than for his or her own benefit.

Clients want a relationship with a financial professional where they know they are both working toward the same goal. Fiduciaries make investment decisions with your best interest in mind and their objective is to help you achieve your financial goals.
As a client, if you want any of these specific traits from your financial professional you are seeking a fiduciary.

• A professional that puts your interest first
• A professional that understands your specific financial situation
• A professional that offers straight forward advice that reflects your goals
• A professional that recommends solutions that best fit your needs

Fiduciaries are committed to providing the best personal service, attention, and honest advice to every one of their clients.

There are many differences between a fiduciary and other advisors. Here are six examples:

1. Investment recommendations are not influenced by commissions on financial products.
2. Account activity is independent of transaction fees.
3. Recommendations are uncompromised by ownership interest in financial products.
4. Fiduciaries are free to take advantage of no-load financial products which have no sales commissions.
5. Compensation is linked to performance.
6. Regulators hold fiduciaries to the higher standard of “what is in your best interest” instead of what is merely “suitable” for you.

Structurally, philosophically, and legally fiduciaries are different from other advisors. This difference is even recognized in the Federal Law. Fiduciaries, by law, perform to the higher standard of acting in the clients best interest and are required to document a signed written code of ethics and fully disclosed compensation plan. Fiduciaries are paid by their clients for their professionalism in financial planning and management. They do not receive any compensation from financial products, such as; commissions, transaction fees, bonuses, free travel or other non-cash gifts. This trademarked term, known as “fee-only” pertains to the provision of financial advisory services and created standards around who was entitled to use this trademark. As the concept was successful and the practice advice grew, the competitive response of other non-fiduciary advisors was the so-called term “fee-based”. This effectively confused the investor and made them believe “fee-only” and “fee-based” were the same service or concept. However, a “fee-only” advisor accepts a fee as their only compensation and a “fee-based” advisor imposes a fee in addition to other charges that may be difficult to discover.

We see these “fee-based” advisors as “faux advisors”. Much to our dismay, these “faux advisors” have been successful at confusing the public mind. Is your advisor a true fiduciary? If not and you want to find out how a fee-only advisor will make a difference, please reach out to us at www.financialfiduciariesllc.com or call us a 1-800-950-8110.

About Objectively Speaking

Tom Batterman, founder of Vigil Trust & Financial Advocacy and Financial Fiduciaries, LLC is in the business of representing the best financial interests of his clients. Having provided objective, fee-only financial management services for over two decades, he specializes in managing the investment and related financial affairs of individuals and mutual insurance companies who do not have the time, interest or expertise to manage such matters on their own. As an objective, unbiased professional who takes on a fiduciary responsibility to his clients, he guides clients to the financial decisions they would make themselves if they had years of training and experience and the time and expertise to fully research and understand all of their options. Founded in 2010 as an outgrowth of Vigil Trust & Financial Advocacy, Financial Fiduciaries, LLC is a financial management solution for individuals and mutual insurance companies who recognize they do not have the time, interest or expertise to properly attend to their financial matters on their own. While there are many financial “advisors”, most of them have investment products to sell and the “advice” they provide is geared toward getting their clients to engage in a purchase. As one of the rare subset of advisors known as “fiduciary advisors”, Financial Fiduciaries does not sell any investment product so its guidance is not compromised by conflicts of interest which plague ordinary advisors. Prior to his employment in the financial industry in financial advocacy and trust positions, he worked at a private law practice in the Wausau area in the areas of estate planning, tax, retirement planning, corporate organizations and real estate. He is a graduate of the University of Wisconsin-Madison and the UW-Madison Law School and has during his career held Series 7, 24 and 65 securities licenses. A longtime resident of the Wausau, Wisconsin Area, Tom is active in the community. He enjoys golf, curling, skiing, fishing, traveling and spending time with his family.
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