What’s a fiduciary?

Fiduciary means that advice you receive must be in your best interests. As an advisor who is a fiduciary, that means I don’t accept or pay commissions, finder’s fees, or referral fees. Any advice or recommendations that I make carry no incentives or compensation of any kind, beyond the fees you pay directly to me. So why does it matter? Let’s say the right recommendation for you would include an investment in a large company mutual fund. As a fiduciary advisor, I would recommend a no-load mutual fund that had excellent performance and low internal management fees (charged by all funds). That would be in your best interests, because the cost would be rock-bottom low and the quality high. If you went to a non-fiduciary (e.g., a stockbroker or other salesperson), the recommendation could be a large company mutual fund that paid a commission to the “advisor”. That person would not need to consider the level of internal management fees. They would only need to determine that the investment was “appropriate” for you, a much lower standard of care. Someone who accepts commissions is most likely going to prefer the fund that offers the highest commission, not what saves or makes you the most money. Fiduciary is a very important factor, and any advisor should be willing to sign a statement as to whether they are a fiduciary. I’ll sign one, gladly.