What It Means To Be A Fiduciary

To reiterate, I am a fiduciary since we do not earn commissions on investments that I recommend to clients.  What this means is I have a fundamental obligation to act in the best interests of your clients and to provide investment advice in your clients’ best interests.  I owe my clients a duty of undivided loyalty and utmost good faith and will not engage in any activity in conflict with the interest of any client.

The SEC has written about how an investment advisor must be a fiduciary and what else I must do as a result which you can read here.

A firm called Hightower created a simple whiteboard video that explains the difference between a broker and a fiduciary in a simple and effective way.  What’s humorous is Hightower is dually registered which means it has a broker-dealer affiliate.  What that means is if you’re a client and you have a brokerage account and an advisory account, your advisor can earn commissions and earn an advisory fee.  Why that’s a problem to me is you don’t know whether you’re talking to a fiduciary or broker earning a commission in any given moment, even though you’re speaking to the same person.

Regardless, enjoy the video.

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