Fiduciaries are tasked with managing a client’s investments to make sure they’re being used properly and wisely so that their clients’ well-being comes first. They act in your interests when it comes to managing money or property on behalf of the two parties involved — themselves (the agent) as well as those they represent (their principal).
Why does having a Fiduciary benefit you?
Most people think that financial advisors are required to follow a fiduciary standard. But the truth is, not all financial advisors legally act in a fiduciary capacity. Only when financial advisors provide advisory services, do they act in a fiduciary capacity.
The most important thing about this role? It’s not what agents do; rather – it’s how carefully they approach every client relationship because their actions reflect badly upon all concerned if things go wrong.
Trust is an important part of a successful relationship. When you can put your complete trust in someone, it means that they have been granted power over your life and what matters most to you. Needless to say, this kind of trust is a valuable component of the advisor-client relationship.
It’s important to know the difference between a fiduciary and financial advisor – A financial professional is someone who holds themselves out as knowing finances, such as an accountant or lawyer.
A fiduciary is a person who has a legal fiduciary obligation to clients on advice such as when it comes down to how best you should be spending money; this includes accountants, guardians (someone who takes care of elderly parents), asset managers, etc. The two are both important to a financial future, it just depends on your specific needs.