Fiduciary

What is a fiduciary?

A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties. Per the Financial Planning Coalition, “The fiduciary standard of care requires that a financial adviser act solely in the client’s best interest when offering personalized financial advice.”

When selecting a financial advisor, you want to be sure you’re working with a fiduciary.

All members of the Spokane Financial Advisors Network must operate as fiduciary advisors in all aspects of their practice at all times and strongly support that the fiduciary standard of care be the standard for the financial planning profession.

Who abides by the fiduciary standard of care?

Under the Investment Advisers Act of 1940, which is a federal law, investment advisers are regulated by the Securities and Exchange Commission (SEC) or appropriate state authorities and are required to provide services to their customers under the fiduciary standard. Furthermore, CERTIFIED FINANCIAL PLANNER™ professionals that provide financial planning services must also abide by the fiduciary standard of care, as defined by CFP® Board.

Broker-dealers are also regulated under federal law, including under the Securities Exchange Act of 1934, but are not required to provide services to their clients under the fiduciary standard. Instead, broker-dealers provide services under “Regulation Best Interest” which is an attempt to make conflicted brokers more fiduciary-like. This has further muddied the waters, especially for consumers. When in doubt, ask your financial advisor (or potential financial advisor) if they operate by the “fiduciary standard of care” and have them provide their fiduciary oath. If that advisor is also fee-only and independent, that will ensure they are acting in your best interest.

Why is this important?

Countless individuals and families are harmed every year by financial advisors not acting in their best interest. This is why the industry has such a sullied reputation. A uniform fiduciary standard that applies to all financial professionals who give personalized advice is necessary in order to protect consumers and raise the quality of the profession.

You can rest assured that every advisor in our network is a fiduciary advisor.