Does Your Financial Advisor Use the “F” Word?

They should, especially when “F” stands for Fiduciary.

A Fiduciary is a financial advisor who makes investment decisions that are in the best interest of the client. Sounds obvious, right? But not all money managers are Fiduciaries. Many stockbrokers and others in financial sales make commissions when they sell certain products, so they will naturally push those investments to clients.

Fiduciaries are bound to avoid conflicts of interest and to find solutions for clients, not products to sell them.

The term Fiduciary applies to more than just Certified Financial Planners. Lawyers have a Fiduciary duty to clients. Board Members to the organizations and businesses they represent. Real Estate agents, too.

But too often, people trust their money to friends or acquaintances without making sure they are Fiduciaries. Maybe you play golf with them. Or you worked the grill together at the school fundraiser. When it comes to investments, people often go with the wrong “F” word, choosing a friend over a Fiduciary.

If you want to grow your portfolio a Fiduciary is the best person to entrust it to. Unlike bank or brokerage firm employees, Fiduciaries make decisions with your specific goals in mind vs. what employers incentivize representatives to advise. This alignment of interests is what truly makes working with a Fiduciary extremely beneficial.

So how can you make sure you’re working with a Fiduciary?

While there is no certification or required education to become a Fiduciary, the term is indeed a legal one. Fiduciaries will attest their professional status in writing; ask them to do so. And to sign it.

Also, ask your financial advisor up front if they get paid on commission. They shouldn’t. If you are working with a Fiduciary, she will discuss a flat fee or percentage rate at the outset of your relationship.

Another sign that you are working with a Fiduciary is if, during your first meeting, they ask you questions specific to your cash flow needs and risk tolerance. A Fiduciary may also ask when and how do you want to retire, putting your goals ahead of theirs and creating a long-term plan that is in your best interest.

So go ahead. Use the “F” word.

You will be happy you did.

In 2002, Equitas Capital Advisors, LLC was established as a unique company that blends the resources of a large global corporation with the flexibility of a small boutique firm. The registered service mark of Equitas Capital Advisors is Engineering Financial Solutions® and the purpose of Equitas is to design, build, and deliver investment solutions to meet the goals and objectives of our investors. Equitas Capital Advisors, LLC located in New Orleans, has over 200 years of combined investment management consulting experience providing professional investment management services to investors such as foundations, endowments, insurance companies, oil companies, universities, corporate retirement plans, and high net worth family offices.

Disclosures and Disclaimers:
Above information is for illustrative purposes only and has been obtained from reliable sources but no guarantee is made with regard to accuracy or completeness. It is not an offer to sell or solicitation to buy any security. The specific securities used are for illustrative purposes only and not a recommendation or solicitation to purchase or sell any individual security.

Equitas Capital Advisors, LLC is registered as an investment advisor with the U.S. Securities and Exchange Commission (“SEC”) and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the advisor has attained a particular level of skill or ability.

Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author on the date of publication and are subject to change. This publication does not involve the rendering of personalized investment advice.

Charts and references to returns do not represent the performance achieved by Equitas Capital Advisors, LLC, or any of its clients.

Asset allocation and diversification do not assure or guarantee better performance and cannot eliminate the risk of investment losses.

All investment strategies have the potential for profit or loss. There can be no assurances that an investor’s portfolio will match or outperform any particular benchmark. Past performance does not guarantee future investment success.