There has been much concern about the improprieties of some people in the financial services community. What has been made less clear is that there are different standards of responsibility to clients. There are two standards when it comes to providing financial advice. The advice is either provided to a "suitable" standard or the advisor operates as a fiduciary. "Suitable" means it is acceptable, although it may not be the best choice for the client. Acting as a fiduciary legally requires the advisor to provide advice that is the best for the client.
For example, a stock broker is operating under the "suitability" standard when they advise you about an investment. A Registered Investment Advisor provides this advice as a fiduciary. Some advisors operate under both standards depending on the situation. This has resulted in confusion.
Why does this matter to you? Do you only want "suitable advice" or do you want the best advice? I have chosen to provide advice as a fiduciary at all times. I am proud to sign this Fiduciary Oath as my commitment to you. When considering an advisor, ask whether they have made the same commitment.
I believe in placing your best interests first. Therefore, I am proud to commit to the following five fiduciary principles:
• I will always put your best interests first.
• I will act with prudence; that is, with the skill, care, diligence, and good judgment of a professional.
• I will not mislead you, and I will provide conspicuous, full and fair disclosure of all important facts.
• I will avoid conflicts of interest.
• I will fully disclose and fairly manage, in your favor, any unavoidable conflicts.
Tom Roberts, CFP®