Have you ever read a financial article or blog post and put it down after reading the first paragraph because the terminology didn’t make sense? If so, you’re not alone. Many of you have probably heard the word “fiduciary” thrown around when it comes to financial advisors and their duties, but do you know what it means? More importantly, do you know what it means for your money?
What is a Fiduciary?
The primary duty of a fiduciary is to put your needs first and to provide advice and recommendations that will benefit you. Think of a fiduciary as a trustee, someone who is given and accepts the responsibility of managing assets for someone else. This duty protects you from conflicts of interest.
For example, fiduciary duty prevents an advisor from making an investment with your money solely for a kickback commission. For those who don’t adhere to a fiduciary standard, a recommendation made by advisors only has to be “suitable.” The problem with this is that some advisors could then sell high-fee products, even if a lower-priced option was just as suitable or available, in order to receive a higher commission.
The fiduciary standard includes providing guidance that is objective and considered beneficial to you, and fees that are clear and upfront. The fiduciary standard can give you confidence that your hard-earned money is in good hands.
Who is a Fiduciary?
While some advisors may toss the term around lightly, not all advisors are fiduciaries. Brokers, insurance agents, and real estate agents acting on the other party’s behalf are not required to serve in a fiduciary manner. As they represent themselves or their company, they are only required to provide you with “suitable” financial products, rather than those recommended based on your individual circumstances.
Wall Street brokerage firms can sell proprietary products, so their advice may potentially be biased. For example, annuities and other high-fee investments that provide brokers a higher commission can still be sold into your retirement account. Additionally, while brokers must inform clients that they’re choosing to be paid commissions, if the investor neglects to read the fine print, they won’t know where their broker’s interests lie.
At Newbridge Wealth Management, we are an independent firm committed to helping you reach your goals. Our approach to investing is founded upon the highest fiduciary standards. Our independence serves as a basis to create a specific investment strategy tailored to pursue your financial goals. Our advice is driven by one concern alone – the best interest of our clients.
We are dedicated to providing you with the best advice we can give while being as objective as possible when analyzing your unique situation. We act with undivided loyalty to you and provide complete transparency and disclosure when it comes to our compensation or investment approach.
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.
By working with an advisor who holds to fiduciary standards, you can feel empowered to make the best decisions for you and your finances. Clients have the power to ask questions and to demand the highest value for the service that advisors are providing. As a firm in the financial world, we understand people’s reservations or even negative connotations towards 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.
Your Next Steps
It’s important to thoroughly research an advisor before choosing to work with him or her. An advisor should be open to sharing their business philosophy, how they choose investments, what their process looks like, any potential conflicts of interest they face, and how they’re paid.
At Newbridge Wealth Management, we take pride in our transparency and objectivity. If you’re unsure about your current financial strategies, haven’t reevaluated your investments in several years, or are just interested in learning more about what it means to work with a fiduciary, I am happy to offer you a complimentary consultation. Schedule a free 15-minute introductory phone call now!
About Vincent
Vincent R. Barbera, CFP®, MSFS is a managing partner and co-founder of Newbridge Wealth Management, a private financial counseling firm located in Berwyn, Pennsylvania. Believing in a patient, disciplined approach to investment management that delivers value and peace of mind, he utilizes a process-driven approach to financial planning that provides comfort and clarity to his client’s long-term goals. Along with a bachelor’s in psychology and business, he has a master’s in business and financial planning and Certified Financial Planner™ designation. Learn more by connecting with Vincent on LinkedIn or send him questions at vincent@newbridgewealth.com.
