Financial advisors who operate under a Fiduciary Standard occupy a position of trust and confidence when working with a client. Under the Fiduciary Standard, financial advisors are required by law to act with loyalty to the clients and their financial interests. The method of compensation and any possible associated conflicts of interest held by the fiduciary financial advisor are to be disclosed and updated regularly. At Allodium Investment Consultants in Minneapolis, MN, we operate under the Fiduciary Standard, placing the financial interests of our clients first in all services we provide and implement.
A fiduciary financial advisor should exhibit the following traits:
Trust - If clients are unable to trust their financial advisor, they can never be fully confident that they are receiving the best possible advice from their advisor. Without trust, can confidence really be achieved?
Loyalty - An advisor who is loyal to only their clients will not be swayed by outside forces to recommend investments with higher commissions or payouts. Without loyalty, can people ever be sure their own interests are being looked after?
Disclosure - Clients must know how the financial advisor is compensated for his or her advice and whether any conflicts of interest are present that may hinder the advisor’s ability to offer truly independent financial advice. Without disclosure, can prudent advice be provided?
When a fiduciary financial advisor displays loyalty and discloses any possible conflicts of interest, it is possible to form a relationship with the advisor based on trust.
To learn more about the Institute for the Fiduciary Standard, click on the link below.