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Family OfficeRetirement

Is Your Wealth Advisor a Fiduciary?

By October 11, 2018No Comments

EXECUTIVE SUMMARY

In the universe of financial professionals you will come across many types of individuals all with differing educational and experience backgrounds. Due to the overwhelming number of financial professionals it can be extremely difficult to distinguish one advisor from another. However, one simple distinction can help sort through a vast number of advisors within seconds. Ask them one question: are you a fiduciary advisor? Yes or No!

A fiduciary advisor is one that is required by law to act in your best interests whereas the non-fiduciary advisor (ie: stock broker) may face a strong conflict of interest when recommending “suitable” investment solutions to you which often lead you, the investor, down a path that is not in your best interest.

What is a Fiduciary?

A fiduciary is defined as an individual in whom another has placed the utmost trust and confidence to manage and protect property or money. The relationship wherein one person has an obligation to act for another’s benefit. The duties of a fiduciary include loyalty and reasonable care of the assets within custody.

Why work with a Fiduciary Advisor?

  1. Fiduciaries put client’s interest above their own
  2. Owe a duty to the client to act with utmost good faith
  3. Full and fair disclosure of all material facts
  4. Fiduciaries must reveal any conflicts of interest

Fiduciary Standard vs. Suitability Standard

In contrast to the fiduciary standard, the suitability standard requires merely that the stock-broker uses an investment that is “suitable” for the client. Therefore, the investment professional can recommend more expensive products as long as the product is “suitable” to you!

A second key distinction is loyalty. A broker-dealer who is functioning under the suitability standard owes a loyalty to their broker-dealer as opposed you their client.

Independent vs. Non-Independent

A lesser acknowledged component to your financial professional is their independence, meaning whether or not if they’re affiliated with a major brokerage firm. If the advisor is affiliated with a major brokerage firm, such as Morgan Stanley, Wells Fargo, Bank of America Merrill Lynch, Baird, or Edward Jones, they will often be told which products to sell, which stocks to recommend and how they must conduct their business. Thus, if your advisor works under the scope of one of these major brokerage firms, you most likely will be receiving advice that is “boiler plate”, conflicted and limited to the specific firm’s “approved” investment products.

Alternatively, an independent advisor has the entire investment universe to choose from when recommending investment opportunities for you and does not have to “push products” for one particular brokerage firm or company.

An independent Registered Investment Advisor (RIA) chooses a third party, independent custodian to handle the “back office”, administrative tasks, like account opening and monthly statements, etc… These RIA’s are fee-based and do not charge commissions for each transaction.

Fiduciary Advisor Appleton, Wisconsin

Endowment Wealth Management is an SEC Registered Investment Advisor (RIA) and serves our valued family clients as an Independent Fee-Based Fiduciary Advisor, staying unbiased and always putting our clients’ personal goals and interests first. We are truly Family Wealth Advisors working together to protect our clients’ most valuable asset their family. We work as a team and integrate assets, your estate plans and tax strategies; always focused on sustaining your Family Wealth, Values, Unity and Legacy.

Our firm is headquartered in Appleton and has offices in Milwaukee and Chicago. We are a team of independent Professionals with over 100+ years of experience who collectively advise our clients.

Have Questions? Need an expert opinion?

If you have more questions I’m happy to help you! We make getting answers super easy, without having to talk to some high-pressure sales person. Just use the secure contact form to ask a question, or email me directly at Sam@EndowmentWM.com, and I’ll get back to you via email within 48 hours to help point you in the right direction. I also offer a free wealth discovery meeting where we can discuss your personal situation and make sure you’re on the right path. Remember, it’s free to contact us and we are fiduciary advisors putting your personal needs first and foremost.

Yours Sincerely,

Samuel Moore
Wealth Advisor
Endowment Wealth Management, Inc.

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