To be a Fiduciary…
What does this mean? Let's start with a definition.
"Fiduciary," as in Black's Law Dictionary, means a relationship in which one may not "exert influence or pressure upon the other, take the selfish advantage of his trust, or deal with the subject-matter of the trust in such a way as to benefit himself or prejudice the other…..business shrewdness, hard bargaining, and astuteness to take advantage of the forgetfulness or negligence of another being totally prohibited .... "
In the financial advisory world, to be a fiduciary means the duty to put our clients'interests ahead of our own.
A brief history lesson takes us back to the ancient Greek system of logic that became known as natural law. Codified by the Greeks, Romans, and English, the main point of natural law is to inhibit the abuse of power by those in a position of influence. As Aristotle taught, man is the rational animal - the only species that can apply reason to establish values and ethical principles and then choose to act on or to violate those guidelines.
The essence of Greek thinking on ethical behavior has relevance for our time. Restoring trust after the recent high-profile corporate debacles will require a true return to principles of ethical behavior grounded in natural law. Driven by justifiable skepticism, clients have a right to demand that we define, offer and execute an advisory process that is conflict-free, fully disclosed, and that has no hidden agenda.
We are happy to do just that.
Let us show you what we mean. A stockbroker, registered representative or insurance salesman can fulfill their disclosure responsibility for putting your retirement money in a given mutual fund by merely handing over a prospectus.
As a Registered Investment Advisor, we must actually spell out the fees we charge and any conflicts of interest we may have in choosing that fund. Further, as a fiduciary, it is not enough to simply do what is in our clients' best interest. We must be able to prove in court that we have done what a "prudent expert" would have done in that same situation.
Again, we are happy to do just that.
So, ask any other "financial advisor" you may be talking to some of these questions.
Do you have a sales quota that you have to meet periodically to stay affiliated with your present firm?
What is the difference between fees and commissions, and how do they affect our relationship?
What is the mix of commissions vs. fees in your annual revenues?
Do you offer continuous, ongoing advice regarding my financial assets, including advice on non-investment financial issues?
Do you earn compensation from any of the following sources: 12(b)-1 fees, trailing commissions of any sort, surrender charges, back-end fees, soft dollar benefits, or eligibility for sales prizes?
Pay attention to the answers. They will tell a lot about whose interest is being served.
To be Independent…
We are fiercely independent! We work only for our clients. No outside company exerts any pressure on us to sell anything to anyone. This is the only way we will do business.
To be Objective…
Our commitment to you is to find the best investment opportunities that fit your overall needs. While there are thousands of investments to choose from, only those that will benefit your financial goals are considered and executed.
To be Unbiased…
We have strong opinions, but we are not biased toward any particular investments or investment style. We would never blindly embrace conventional thinking that would include a “cookie cutter” approach. Our way of investing is custom-fit to your unique financial needs.
What all this boils down to is that we have to put your interests ahead of our own.
Our advice has to be independent, objective and unbiased.
These are the principles that we have built our practice around.
We just want you to know how we feel about this, and why it should matter to you.