What is a Fiduciary?
Think of a Fiduciary as a guardian or caretaker who is legally obligated to prioritize your best interests when handling your affairs. They have to act in the best interest of their clients, and they need to be truthful in the relationship. Trust Point is a Fiduciary, for example.
What are the principles of Fiduciary Responsibility?
First and foremost is putting the clients’ interests first. That extends from client meetings to performance reviews, and to the way portfolios are managed.
Another principle of fiduciaries is acting with prudence – really making sure that clients know what you’re doing and educating them along the way. As a fiduciary, we fully disclose and are fully transparent with our fees. There are no sales commissions and there’s no kickbacks.
Since we are held to a fiduciary standard, avoidance of conflicts of interest is paramount in the way that we do business.
Are all financial advisors Fiduciaries?
Not every financial advisor is held to that fiduciary duty. There are two standards that financial advisors, planners or institutions are held to. The first is a standard of suitability. A suitability standard means an advisor can recommend a fund that maybe rewards the client more versus the one that is ultimately best for them because they’re both suitable. This standard doesn’t require the advice to be in the client’s best interest. The second standard is the fiduciary standard. Trust Point is a true fiduciary. We truly act in our clients’ best interest; we’re legally bound to do that. It’s also part of our philosophy.
How are fiduciaries compensated?
Trust Point, like many fiduciaries, charges our fees on assets under management. Our fees are very transparent, and we take pride in fully disclosing everything that we’re charging our clients and how we make money. There are no commissions, there are no kickbacks; it’s directly related to the performance of the account. So, we like to say that we have a little “skin in the game”.
What would you recommend to someone looking for a financial advisor?
When meeting with a prospective financial advisor or financial planner, there are certain disclosures that could be obtained to prove that they are held to a fiduciary standard. Potential clients also need to ask how their advisor is getting paid, by simply asking “What are the fees?”
Understanding how they get paid is one of the best ways to vet out if they are suitable for you as an advisor. It’s also important to ask what kind of investments your advisor is going to be putting into your portfolio.
As a fiduciary, Trust Point does not sell any products. We don’t sell life insurance; we don’t sell annuities. We’re here to serve our clients. Bottom line – when our clients do well, Trust Point does well.
