Is Your Financial Advisor A Fiduciary?

By Nick Fisher, CFP®

There are financial advisors everywhere you turn. The problem is not finding one, but finding the right one, someone you can trust to provide honest advice and help you achieve your goals.

Unfortunately, whether someone calls him or herself a financial advisor, financial planner, wealth manager, or financial consultant, it doesn’t tell the consumer anything about the standard to which the advisor is held. This can be incredibly confusing for many people. It’s important to not look for a particular job title but ask your current or prospective financial advisor whether or not they are held to the fiduciary standard. Only then will you know if the advisor truly has your best interests at heart.

Terms, Defined

If you’ve ever researched financial advisors, you may have noticed there are many different types of advisors from which to choose. Some of the most common types of financial advisors are brokers, fee-only fiduciaries, and independent financial advisors. It’s important to know the standards each type of advisor is held to as you’re deciding who to hire.

In a nutshell: 

  • Brokers manage your portfolio but also sell financial products such as mutual funds or insurance policies, for which they earn a commission. They are not held to a fiduciary standard, so they may not always act in your best interest.
  • Fee-only fiduciaries may charge a flat fee, or a percentage of your portfolio, but they are always held to a fiduciary standard, in which they are required to act in your best interest.
  • Independent financial advisors have started their own financial firm. Most independent advisors act as fee-only fiduciaries, but some may act as fee-based advisors and sell additional financial products on a commission basis.

More About Fiduciaries

In general terms, a fiduciary is a person or entity who has the power to act for another in situations that require complete trust. When it comes to the financial industry, Financial Advisors who work for a Registered Investment Advisor firm must always act as a fiduciary for their clients.Certified Financial Planner® (CFP®) professionals are also held to this duty when providing financial advice to their clients. By law, a fiduciary advisor must be completely transparent and always act in their clients’ best interest. They are also obligated to avoid and disclose any potential conflicts of interest.

Additionally, the ongoing services and investment monitoring they provide also falls under the fiduciary duty. In other words, their job doesn’t end after the initial meeting or purchase. They must regularly review your accounts to help ensure your investments are in your best interest.

There are financial professionals whose services do not fall under the fiduciary standard. This doesn’t mean that they are out to steal your money and can never be trusted—far from it. These financial professionals who register with FINRA are held to a standard known as Regulation Best Interest (Reg BI). This is a step in the right direction, but doesn’t take things as far as the fiduciary standard for Financial Advisors who work for a Registered Investment Advisor firm that registers directly with the Securities and Exchange Commission.  

Why Should I Work With A Fiduciary?

There are several benefits to working with an advisor who serves in a fiduciary capacity. For one, they are open and transparent. Aside from the obvious goal of maximizing value for your money, working with a fiduciary will give you confidence that your advisor is working in your best interests rather than their own. They’ll give you their true, professional opinion (even if it’s not the answer you want to hear). This is extremely valuable when you’re facing a big life decision, whether it’s purchasing a second home, transitioning into consulting work, or retiring earlier than anticipated. Reviewing your entire financial picture, an advisor can show you the impact a decision may have on your future and how you can pursue certain goals.

By working with an advisor who holds to the fiduciary standard, you can be confident in your financial future. Clients have the power to ask questions and to demand the highest value for the service that advisors are providing. As a Registered Investment Advisor firm , we understand people’s reservations or even negative connotations toward the underlying motivations of some advisors. We want to assure you that you can trust in the fact that our relationship with you is built on integrity and putting your interests above our own.

Comprehensive Coordination

Independent, fiduciary advisors do so much more than just pick your stocks. Working with an experienced financial expert can be a realistic sounding board to help provide you with a litmus test when you have questions or face a big financial decision. They actively coordinate the accumulation, distribution, and transfer of your wealth, as well as between the estate, tax, and financial planning areas of your retirement plan. An advisor who looks at the big picture of your financial life can help you optimize income and mitigate taxes in retirement. 

For example, this type of advisor helps you create a retirement income plan that strategizes when you take your withdrawals and what accounts you take them from first; not to mention, they also design a Social Security strategy that optimizes your benefits, minimizes Medicare confiscation, and addresses long-term care so you can feel confident that you’re on the right track as you pursue your long-term goals. The objective advice of an independent fiduciary advisor can make an incredible impact on your financial situation in retirement. 

Do I Need A Fiduciary?

If you want to feel empowered to make the best decisions for yourself and your finances, the answer is yes. 

At WealthBridge Capital Management, we pride ourselves on being fiduciaries and upholding the highest integrity. Whether you’re looking for an advisor for the first time or have been burned by bad financial advice in the past, we’re here to help you create a solid plan that helps you achieve your goals. To get started, reach out to me to schedule an introductory meeting by calling 614.964.9600 or emailing Nick.fisher@wealthbridgecm.com today. Or schedule a meeting here

About Nick

Nick Fisher is a CERTIFIED FINANCIAL PLANNER® (CFP®) professional at WealthBridge Capital Management with over eight years of experience in the financial planning industry. Nick specializes in helping retirees, medical professionals, and university employees who want to outsource their financial world to a dedicated professional who will help them achieve their goals and ultimately provide peace of mind for their financial future. Nick graduated from The Ohio State University with a bachelor’s degree in business administration, finance, and insurance. When he’s not working, Nick and his wife enjoy traveling to visit friends and family who live throughout the country. They are active volunteers with their church, Rock City, as well as with the United Way through LINC, a young professional group dedicated to fighting poverty in Columbus. To learn more about Nick, connect with him on LinkedIn.

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