Money Shepherds: Fiduciary Advisory's True North

A fiduciary is a legal professional responsible for managing assets for clients acting in their best interest. They can be financial advisors, lawyers, estate executors, or agents.

Fremont, CA: Working with a fiduciary financial advisor is crucial to avoid financial difficulties, mismanagement, or theft. These professionals, required by law to offer financial advice and product recommendations in clients' best interests, ensure responsible financial guidance, preventing potential mismanagement or theft of money and decisions.

What Is A Fiduciary?

A fiduciary is a legal professional responsible for managing assets for clients acting in their best interest. They can be financial advisors, lawyers, estate executors, or agents. Robo-advisors, automated software systems registered with the SEC, have a fiduciary duty to clients. However, some financial professionals argue they cannot create custom financial plans based on unique customer situations.

What Happens If Fiduciary Duty Is Breached?

Suppose a fiduciary financial advisor breaches their duty to act in their client's best interest. In that case, they may face consequences like trading without consent, failing to disclose conflicts of interest, or making excessive commissions. If clients believe the advisor breached their duty, they should terminate the relationship immediately. If damages occur, they may file a civil claim and face disciplinary action, potentially damaging their reputation.

How Do I Find A Fiduciary Financial Advisor?

Finding a fiduciary financial advisor is essential, and finding one can be simplified using free databases. It's crucial to ask if the advisor is a fiduciary and if they always act as such, as some fee-based advisors may not act as fiduciaries while selling commission-based products. Understanding their income model is also essential.

How Do I Know If My Advisor Is A Fiduciary?

Ask them to verify if your financial advisor is a fiduciary or use the BrokerCheck database. Look for credentials like Certified Financial Planner (CFP), Chartered Financial Analyst (CFA), Personal Financial Specialist (PFS), and membership in organizations. These credentials ensure extensive training, thorough examinations, and professional standards, ensuring a trustworthy and professional relationship.