March 30, 2023

When you’re looking for someone to help you manage your finances, you’ll often hear the term “fiduciary” thrown around. But what exactly is a fiduciary, and why is it so important to work with someone who is a fiduciary all of the time?

Simply put, a fiduciary is someone who is legally obligated to act in your best interests. This means that they must put your interests ahead of their own, and they must always act in good faith when dealing with your finances.

In the financial world, there are two types of advisors: fiduciary and non-fiduciary. Non-fiduciary advisors are only required to recommend products that are “suitable” for you, which means that they don’t necessarily have to be the best options for your specific financial situation. Non-fiduciary advisors may also receive commissions or other incentives for recommending certain products or services, which can create conflicts of interest.

On the other hand, fiduciary advisors are legally required to act in your best interests at all times. They must disclose any potential conflicts of interest, and they must recommend products and services that are truly in your best interests.

So why is it so important to work with a fiduciary all of the time? Here are just a few reasons:

1. They’re legally obligated to act in your best interests. When you work with a fiduciary, you can be confident that they’re always putting your interests first. They’re not motivated by commissions or other incentives, so you can trust that their advice is truly in your best interests.

2. They’re held to a higher standard of care. Fiduciaries are held to a higher standard of care than non-fiduciary advisors. This means that they must act with a greater degree of expertise, care, and diligence when dealing with your finances.

3. They can help you make more informed decisions. Fiduciaries have a duty to provide you with all of the information you need to make informed decisions about your finances. They must disclose any potential conflicts of interest, and they must explain the pros and cons of different products and services.

4. They can help you avoid costly mistakes. Because fiduciaries are held to a higher standard of care and must act in your best interests, they can help you avoid costly mistakes that could harm your financial future.

In short, working with a fiduciary is crucial if you want to ensure that your finances are being managed in a way that truly benefits you. When you work with a fiduciary, you can have confidence that your advisor is always acting in your best interests and helping you make informed decisions about your financial future.