19 Aug What Is Fiduciary Advice (and Why Does It Matter)?
Hi, it’s your Money Mavens and we’re on the lookout today.
For P/E ratio. For lump-sum investing. For alpha and beta. For daily dividend factors.
What do they all have in common?
For our team, we’ll confess to ‘geeking’ out a bit on the more technical terms of our work.
But for you, the investor? It sounds like Greek or gobblygook (or Greek gobblygook).
We abhor using financial jargon when talking with you.
You likely have no use for the more ‘techy’ terms, at least not most of the time.
However, one term that can sound a bit more technical that does carry significant value to you is fiduciary.
That’s one term we want all of our listeners, readers, clients, family members, and future friends to know!
It’s the word that carries more weight than titles and designations.
Because that word is all about Y-O-U.
The word “fiduciary” is used as a banner of professional integrity for our financial services.
While anyone can call themself a financial advisor, not everyone can claim to be a fiduciary, and this is crucial to understand.
What is a Fiduciary?
A fiduciary is:
A financial expert who is legally and ethically bound to present clear, evidence-supported recommendations in alignment with your unique financial goals and who can also take intentional action on your behalf with the primary purpose of protecting, growing, and distributing your wealth for your sole benefit.
Financial advisors who are fiduciaries have the highest legal duty to perform services and offer products that are best for you.
Not satisfactory. Not simply OK. Not suitable. Best.
Fiduciaries are sworn to the highest levels of care when it comes to your financial well-being. End of debate.
So, why does that matter to you? How could our role as fiduciaries impact you and your financial future?
Fiduciary Advice Is Key to Any Advisor-Investor Relationship
If you were diagnosed with a life-threatening ailment, you wouldn’t want to go to a doctor who offers you only ‘suitable’ treatment.
You, we assume, would want the best care possible with the highest likelihood of saving your life.
Your personal finances may not seem life-threatening, but they are certainly life-altering.
The decisions you make with your money today, how you invest it, and who you trust to help manage your finances will impact your life today and well into the future.
For decades, the fiduciary standard has shaped this highest level of care for those of us committed to delivering it.
The problem is being a fiduciary wasn’t legally enforceable (and still isn’t in all scenarios), until recently when a few local legislations began signing fiduciary requirements into state law.
And then the U.S. Department of Labor’s (DOL) Fiduciary Duty Rule is now fully in effect (but it’s for retirement accounts only).
But the best part? Our team of financial professionals with Hendershott Wealth Management already operated as true fiduciaries well before it was required.
Having a fiduciary duty to our clients puts us on similar footing with other professional consultants, such as physicians or attorneys.
You hire us because you trust our expertise to create a path to your financial and life goals.
It’s a tremendous responsibility to provide services to clients under the fiduciary standard of care.
There’s a reason why the CFP® designation is one of the most sought-after designations in the financial industry.
CERTIFIED FINANCIAL PLANNERS™ are all held to the fiduciary standard of care and must abide by it in their financial planning profession to maintain the CFP® designation.
That starts with operating as fiduciaries in every conversation, decision-making moment, and how we present various investment options for your consideration.
That’s the standard we gladly hold to for one simple reason…
Because your trust is worth putting your interests above our own.
We sleep well and start our days with smiles (albeit, after a cup of coffee) knowing we’re working to give you the best possible experience for your best interests.
Your finances are your future, and who you work with matters.
Our fiduciary duty to our clients is included in all of the financial advice we provide to them – including the profits consulting we offer entrepreneurs in our Money Blueprint® program.
To your prosperity,
Your HWM Money Mavens