a person to who property or power is entrusted for the benefit of another - dictionary.com
Fiduciary standard is an important topic in the advisory business, but it can be confusing for clients. A fiduciary standard means client interests are put ahead of the advisor, the firm, or any other person or entity. The advisor must act in the best interest of the client, at all times, and before their own interest. Conflicts of interest must be removed, or fully disclosed.
Understanding how an advisor is compensated helps build trust. They should be transparent about fees, referrals, commissions, or any other economic benefit they may receive through their actions.
Putting client’s interests first should not only be the result of a regulatory directive. It should be instinctive and part of how the firm interacts with clients. Honesty, integrity, and serving clients by thinking of their needs should be part of an advisor’s DNA. Good advisors operate that way because it is the right thing to do, not just because they have to.
Our partners at eMoney created a short video about the topic.
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