Who Can Be Trusted? The Fiduciary Differentiator

By Karla Paxton, Technical Relationship Manager on Wednesday, March 9th, 2011

The discussion regarding the implementation of a common fiduciary standard for anyone giving financial advice may be shelved far back in the minds of congress, but for an investor making a decision on whom to trust as their financial advisor it is still very important.  

I took a sneak peak at the results from ByAllAccounts’ March survey on fiduciary responsibility (check back to our homepage next week for the full results). Over 85% of advisors that participated said they considered themselves to currently be acting as a fiduciary for their clients (of which, 51% considered doing so as being an extremely big differentiator).   When you're an RIA, broker, or commissioned-based rep, I think most would agree that taking your client’s best interests into consideration is, and should be, common practice.  

A big part of putting your clients' interests first is having the ability to look at all of their assets.  Whether they’re held with a primary custodian, in a 401k account, or with any other financial institution(s), creating an Investment Policy Statement, financial plan or asset allocation each require having a full, holistic view of all your client’s financial assets.  

  • Monitoring these financial holdings regularly allows you—as the fiduciary or trusted advisor—to make changes accordingly in accounts over which you have discretionary authority, and suggest changes in accounts you do not.  
  • Having the ability to report on all your client’s accounts also (A) gives clients a more transparent view of their holdings, (B) allows you to discuss changes with the client’s other financial advisors, such as their tax attorney, estate planning attorney and life insurance agent, and (C) opens doors for more assets to advise upon, and for which to bill.   

Acting as your client’s fiduciary is not only best for your client, but also for your practice.  You want to position yourself in your client’s mind as the “go-to” person for all of their financial needs, and position yourself in the market as an advisor that is capable of delivering this level of service.  In the mind of an investor making a decision on whom to trust as their financial advisor, this will be a differentiator. 

Don’t forget to check our homepage during the week of March 14-18 for the complete results from the Q1 2011 Fiduciary Survey. 

comments powered by Disqus