How to Demonstrate You are a Fiduciary
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With a heightened focus on providing fiduciary care, I’ve developed a worksheet that I give to prospects to determine if I – or any other broker or advisor – will always act in their best interests.
My approach is relevant following the passage of the Securities and Exchange Commission (SEC) Regulation Best Interest (Reg BI). Social media is lighting up with praise and condemnation about how investment professionals will be regulated (or not) under this policy during the transition period, until June 30, 2020, and thereafter.
Any attempt to define and regulate a fiduciary standard for an industry as diverse as ours will always be a work in progress. Meanwhile, the nature of offering financial advice that has lifetime implications for the public we serve should always be held to the highest levels of fiduciary responsibility – regardless of any governmental regulation.
As our industry and its regulatory bodies continue to struggle to find common ground to meet the public’s best interest, those clients whom the regulators hope to protect look on with increased confusion and growing distrust.
Who can be trusted?
Consumer trust is the bedrock on which a long-term professional relationship is built. Without a solid foundation of trust, relationships crumble. But how does a person decide whom to trust when shopping for a financial advisor?Even with an ideal fiduciary policy, consumers will still have to decide whom to entrust with life savings and the fate of their financial future.
Trust is about what I do, not what I say
Someone told me a long time ago, “Those who ask for your trust before earning it shouldn’t be trusted.”