Though some may assume that fiduciaries and financial advisors are one and the same, the truth is that there are notable distinctions between the two. A fiduciary must abide by certain regulations that, put simply, require them to give financial advice that is always in the best interest of a client.
The Environments That Fiduciaries Dwell In
Fiduciaries that are found in different areas. There are some that are found in church environments, and they are often referred to as trustees. Fiduciaries may also be found in a retirement planning setting. They tend to work independently or with companies that specifically adhere to the fiduciary standard. What a fiduciary does is take on the roles of managing the money that is put under their responsibility. They are trusted to be the ones that handle money in a professional manner while providing guidance or making decisions in a way that best suits the needs and goals of their clients.
No matter the environment or context, a fiduciary serves as someone that is trustworthy when it comes to handling money. A fiduciary must be trusted enough to manage another individual’s finances, keep accurate records, and make decisions that benefit each client. Because a fiduciary must abide by set restrictions and protocols, clients will find them inherently more trustworthy than financial advisors who do not.
When a fiduciary works with a client, they are bound to certain standards that require them to act on behalf of the client in a way that aligns, not with their own goals, but with those of the client. In other words, a fiduciary is legally required to act in favor of the clients’ wishes, desires, and goals, substantially reducing the risk of subversion, theft, and misinformation. Fiduciaries who are wealth and asset managers will be held accountable if money is not handled properly, and when they operate on behalf of a client (whether that means an individual or, in some cases, an entire organization), it is imperative that they abide by the fiduciary standard for the benefit of their clients.
Organized & Educated
As a fiduciary, these advisors must be able to juggle multiple clients with different goals, levels of experience, and preferences. In order to fulfill the needs of each client, fiduciaries must be open to continuous education and exposure to new and unique strategies, especially when it comes to managing clients’ investment portfolios. Rather than rely on practices that are familiar and acceptable, fiduciaries must be willing to adapt to the changing demands and needs of their clients, making them more versatile and reliable.