In the news, the word “fiduciary” has been thrown around a lot in regards to financial advisors and their duties. The concept can seem confusing to people, as many assume that all advisors, whether they’re stockbrokers or financial planners, are required to act in their client’s best interest. Unfortunately, that’s not the reality. It’s important to understand the distinction between different types of advisors’ roles and what it means for you and your money.
What is a Fiduciary?
The primary duty of a fiduciary is to put your needs first and to provide advice and recommendations that will benefit you. Think of a fiduciary like a trustee, someone who is given and accepts the responsibility of managing assets for someone else. This duty protects you from conflicts of interest.
For example, a fiduciary duty prevents an advisor from making an investment with your money solely for a kickback commission. For those who don’t adhere to a fiduciary standard, a recommendation made by an advisor only has to be “suitable.” The problem with this is that some advisors could then sell high-fee products, even if a lower-priced option was just as suitable or available, in order to receive a higher commission.
The fiduciary standard includes providing guidance that is unbiased, is considered beneficial to you, and fees that are clear and upfront. The fiduciary standard can give you confidence that your hard-earned money is in good hands.
How Do I Know Who is a Fiduciary?
While some advisors may toss around the term lightly, not all advisors are fiduciaries. Brokers, insurance agents, and real estate agents acting on the other party's behalf are not required to serve in a fiduciary manner. As they represent themselves or their company, they are only required to provide you with “suitable” financial products, rather than those recommended based on your individual circumstances.
I am an independent advisor committed to helping you reach your goals. My approach to investing is founded upon a fiduciary standard, and my independence serves as a basis to create a specific investment strategy tailored to work toward your financial goals. My advice is driven by one concern – the best interest of my clients.
I am dedicated to providing you with the best professional advice I can give. Should there ever be a time when one may exist, I make sure that you are aware of it. I believe it’s important to provide complete transparency and disclosure when it comes to my compensation and investment approach.
Why Should I Work with a Fiduciary?
There are several benefits to working with an advisor who serves in a fiduciary capacity. For one, they are open and transparent. Aside from the obvious goal of maximizing value for your money, working with a fiduciary should give you confidence that your advisor is working in your best interests rather than their own.
By working with an advisor who holds to a fiduciary standard, you can feel more empowered to make the right decisions for you and your finances. Clients have the power to ask questions and to demand value for the service that advisors are providing. As an advisor in the financial world, I understand people’s reservations and even negative connotations towards the underlying motivations of some advisors. I strive to create a client relationship that is built on integrity.
Your Next Steps
It’s important to thoroughly research an advisor before choosing to work with him or her. An advisor should be open to sharing with you their business philosophy, how they choose investments, what their process looks like, any conflicts of interest they face, and how they’re paid.
I take pride in my transparency and objectivity. If you’re unsure about your current financial strategies, haven’t reevaluated your investments in several years, or are just interested in learning more about what it means to work with a fiduciary, I am happy to offer you a complimentary consultation. Reach out to me by calling (949) 221-8105 x 2128, or email me at [email protected].
About Mike Loo
Mike Loo is an independent financial advisor with more than 20 years of experience in the financial services industry. His mission is to make a meaningful impact on the lives of clients and the people they care most about, help them make educated decisions with their money, and build a strong financial foundation for both themselves and their next generation. Mike is committed to meeting a high standard of excellence, taking the time to listen to clients’ needs, and designing strategies that aim to help clients save money and reduce debt. He seeks to fit a client’s investments into their life and educate them so they’ll understand their investments. To learn more about how Mike may be able to help, connect with him on LinkedIn, call his office at (949) 221-8105 x 2128, or email him at [email protected].
Mike Loo is a registered representative for LPL Financial. Securities offered through LPL Financial, Member FINRA/SPIC. Investment advice offered through Trilogy Capital Inc., a registered investment advisor. Trilogy Capital Inc. and Trilogy Financial are not affiliated with LPL Financial.