Understanding the Role of a Fiduciary
Most of us have at least one trusted friend who listens to our goals and dreams, understands
our worries, and gives us honest advice. We believe that person has our best interests at heart.
In the financial world, this trusted person is called a fiduciary. The term “fiduciary” isn’t new, but
it’s one you should understand fully.
Simply put, a fiduciary is a financial professional who is legally and ethically bound to always act
in your best interest. This might sound like a given, but you may be surprised to learn not all
financial advisors are held to this standard.
Let’s examine the pros and cons of choosing between a fiduciary and a non-fiduciary advisor.
4 Key Differences: Fiduciary vs. Non-Fiduciary Advisors
1. Fiduciary advisors must prioritize your needs, goals, and interests. Non-fiduciary
advisors may only be required to meet a less stringent "suitability" standard.
2. Fiduciary advisors must avoid conflicts of interest and disclose any potential conflicts.
Non-fiduciary advisors can recommend products that benefit them if they're also
"suitable" for you.
3. Fiduciary advisors offer clear fee structures, typically charging flat fees or a percentage
of assets managed. Non-fiduciary advisors earn commissions on product sales, which
could influence their recommendations.
4. Fiduciary advisors tend to offer more holistic financial planning, considering your entire
financial picture. Non-fiduciary advisors might be focused on selling specific financial
products.
Can working with a fiduciary benefit you?
Many people choose to work with fiduciaries because they’re held to a higher standard.
While many non-fiduciary advisors also operate with your best interests at heart, a fiduciary
can provide:
-Comprehensive, client-focused advice tailored to your unique situation
-Transparent fee structures with no hidden costs
-Comprehensive financial planning that considers your entire financial picture
-Ongoing support and collaboration to help you navigate life's financial challenges
Knowing your options is important, especially when looking for a trusted advisor to help
manage your money.
As a fiduciary advisor, I’m pleased to uphold my obligation to legally and ethically act in the best
interest of my clients. Ultimately, your choice of advisor should depend on your needs,
preferences, and comfort level. Some individuals may prioritize the legal obligation of a
fiduciary, while others might prefer the specific products or services offered by non-fiduciary
advisors. What’s important is understanding your options, and being confident and comfortable
with whomever you choose
.
Securities and investment advisory services offered through Hornor, Townsend & Kent, LLC. Registered Investment Adviser.
Member FINRA/SIPC. 600 Dresher Road, Horsham PA 19044. 800-873-7637, www.htk.com. HTK is a wholly-owned subsidiary of
The Penn Mutual Life Insurance Company. Bridger Financial Group, CSC Financial Strategies, Rossetti Financial, Inc. and listed
entities are independent of HTK. HTK does not provide tax or legal advice. Always consult a qualified tax advisor regarding your
personal tax situation and a qualified legal professional for your personal estate planning situation. 6886604RG_Aug26