What is a fiduciary?

OR So I have to ask every advisor if they put my best interests first? That’s not just the default??

You know how every doctor has to take a Hippocratic oath to “first, do no harm” and treat every patient to the best of their ability?

Well, one of the things that totally sucks about the financial services industry is that we have a version of this - the fiduciary oath - but not every advisor is required to take it.

UM WHAT

Unfortunately, as it stands right now, many advisors are only required to make sure the products they sell you pass the suitability test, which means as long as it meets your goals and risk tolerance, they can present a more expensive product to you as long as they give you disclosures about fees. They have no obligation to tell you about the less expensive, better option. YES, this how it is right now.

One of the top 10 questions that shows up on every “what should you ask an advisor list” is: “Are you a fiduciary?”

And if you don’t ask, it’s somehow your fault you got screwed.

This is #financialgaslighting.

As clients, as consumers, we have a right to assume that the professionals handling our finances have our best interests at heart. We shouldn’t have to ask if someone is going to screw us over or not and if someone does, it shouldn’t be our fault that it happened. But alas, here we are.

Please make sure you ask any financial professional who you plan to have a transaction or relationship with, and if they don’t know how to answer that question, find someone else. There are 250,000 of us who call ourselves financial advisors/planners.

Here’s the fiduciary oath we took:

I believe in placing your best interests first. Therefore, I am proud to commit to the following five fiduciary principles:

I will always put your best interests first.

I will act with prudence; that is, with the skill, care, diligence, and good judgment of a professional.

I will not mislead you, and I will provide conspicuous, full and fair disclosure of all important facts.

I will avoid conflicts of interest.

I will fully disclose and fairly manage, in your favor, any unavoidable conflicts.

So yes, we are fiduciaries because that’s the fucking right thing to do and we are also truly appalled that the industry hasn’t made this standard across the board.

If you want to hear more rants about how folks have tried to make fiduciaries the standard and the pushback they’ve gotten, check out this podcast episode: https://brunchandbudget.com/podcast/bnb93/