What Is A Fiduciary And Why Is It Important?


By John Halterman

We are living in a day and age of information overload. With a sea of data at our fingertips, it is easier than ever to find answers. Unfortunately, it’s not quite as easy to figure out what’s important and what’s true, especially when it comes to financial matters. It is important to decipher between what information is fact and what is just opinion. This is where a professional can be a great asset. But who can you trust when every expert says they have your best interests in mind?

One way to know you’ve found a trustworthy advisor lies in the word fiduciary. The concept of a fiduciary can seem confusing to people as many assume that all advisors, whether they’re stockbrokers or financial planners, are required to act in their clients’ best interest. Sadly, that’s not the reality. Therefore, it’s important to understand the distinction between different types of advisors’ roles and what it means for you and your money.

What Is A Fiduciary?

The primary duty of a fiduciary is to place your needs as the top priority and to provide advice and recommendations that will benefit you the most. In other words, they act in your best interest at all times. Think of a fiduciary as a completely reliable trustee, someone who is given and accepts the responsibility of managing your assets and does so with the same level of interest in your success as you.

This fiduciary duty protects you from conflicts of interest, preventing 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.” This may sound reasonable, but the problem is that it doesn’t have to be the most suitable, which means some advisors sell high-fee products, even if a lower-priced option is just as suitable or available, in order to receive a higher commission. In other words, as long as their services don’t harm you, they can recommend it over a more beneficial option.

Furthermore, the fiduciary standard also includes providing guidance that is objective and beneficial to you as well as fees that are clear and up front. The fiduciary standard can give you confidence that your hard-earned money is in good hands.

Who Is A Fiduciary And Who Isn’t?

While some advisors tend to toss this term around, not all advisors are fiduciaries. Brokers, insurance agents, and real estate agents acting on the other party’s behalf are not legally required to serve in a fiduciary manner.

Wall Street brokerage firms can sell proprietary products, so their advice may still be biased. For example, annuities and other high-fee investments that provide brokers with a higher commission can still be sold into your retirement account. Additionally, while brokers are required to inform clients that they’re choosing to be paid commissions, if the investor hasn’t read the email notification, they will likely continue to remain in the dark about where their broker’s interests truly lie.

Beacon Wealth Management is an independent firm committed to helping you achieve your goals with an objective financial planning approach which is founded upon the highest fiduciary standards. Our independence allows us to create a personalized investment strategy tailored to meet your specific financial goals, and we take pride in upholding high ethical standards as we work hard to create individualized solutions for our clients. Our expert advice has only one motivation—the best interests of our clients.

We are dedicated to providing you with the best advice we can give without any pressure to promote a certain product. 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?

By working with an advisor who holds to fiduciary standards, you become empowered to make not just good decisions, but the best decisions for you and your finances. Clients have the right to ask questions and expect the highest value for the service advisors are providing. As a firm in the financial world, 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.

How Do I Find A Fiduciary?

Before choosing to work with any advisor, it’s important to do your homework. Topics such as business philosophy, how they choose investments, what their process looks like, any potential conflicts of interest they face, and how they’re paid are all areas an advisor should be open to sharing with you. We at Beacon Wealth Management 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, we are happy to offer a complimentary second look at your wealth strategy. Click here to schedule your free 60-minute discovery consultation, call (304) 626-3900, or email me today at jhalterman@bwmwv.com.

About John

John Halterman, best-selling author and nationally published blogger, has been featured as a financial guest expert on the shows of self-help gurus Brian Tracy and Jack Canfield, author of Chicken Soup for the Soul, and has appeared on ABC, FOX, BRAVO, NBC, CBS, and A&E. John is the expert host of the weekly WDTV News 5 segment “Solutions 4 Financial Independence.”

As an authority on wealth management, he has been invited by hundreds of institutions such as universities, federal agencies, professional associations, and large energy and utility corporations to be a guest speaker and educational event host. Event topics include retiring ready, managing down market investment risk, how to reduce your tax burden, and transferring your family wealth in the most tax advantageous way.

John is the founder and owner of Beacon Wealth Management, specializing in helping entrepreneurs, professional practitioners, and retirees overcome the 5 major challenges facing successful families. He is a warm communicator with a passion for helping people transform their financial futures. John understands the multifaceted set of financial worries people face as they become more successful and enter the Retirement Red Zone. He empathizes personally with each client and delivers a collaborative client experience that empowers people to reach their life goals.

With more than two decades of experience, John’s professional credentials include Certified Wealth Strategist, Accredited Investment Fiduciary, Certified Estate Planner, Chartered Federal Employee Benefits Consultant, Professional Plan Consultant, and Registered Financial Consultant. He is also a past member of Ed Slott’s Master Elite IRA Study Group.

A native of Weston, West Virginia, John served in the United States Air Force prior to becoming a wealth advisor. Today, he resides with his family in Clarksburg, West Virginia. He and his wife, Lisa, have been married since 2005 and have three amazing children. A family-oriented man, he enjoys giving back to his community, coaching youth sports, landscaping, architectural design, and playing racquetball.


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Securities offered through Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Beacon Wealth Management operates independently of Cambridge. This communication is strictly intended for individuals residing in the states of DC, DE, FL, MD, NC, OH, PA, SC, TN, TX, VA, and WV. No offers may be made or accepted from any resident outside the specific state(s) referenced.

 

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