What the F is a Fiduciary (and why it should matter to you)?

by | Dec 23, 2020

Let’s get this out of the way first: Empowering Finance and Corey is abso-freaking-lutely a fiduciary. We abide by the fiduciary standard 100% of the time. It’s part of being a Registered Investment Advisor (which Empowering Finance is) and also a requirement of being a CERTIFIED FINANCIAL PLANNER™ professional (which I am).

But what the hell is a fiduciary and why should it matter to you? If you are an auditory or visual learner (or just like videos), check out this fabulous clip which is one of the best videos I have ever found on this subject:

This is one of those dirty little secrets in the wild world of finance, unfortunately. There are two standards by which an investment advisor must abide by, either fiduciary or suitability. The fiduciary standard is the golden standard which should be a requirement of all finance professionals, but that is a topic for another day. The fiduciary standard states that I have an obligation to act in the best interests of my client(s). This is very important as no matter how much companies try to entice me with vacations or promises of $$, I always have to put YOUR interests first. This is a pretty strict standard so no funny business occurs. This is the standard you want from your Advisor and you should be asking any financial professional you work with if they are a fiduciary.

The other standard is the suitability standard, which is bullsh*t in my opinion. Why? Instead of placing YOUR interests FIRST, suitability means only making recommendations that are suitable for you. So what is the big deal? You can get pretty loosey-goosey with what is suitable for a client and this is where things like commissions and so on come into play. For example, if an Advisor is working for a company and only must abide by the suitability standard and their company offers them $5 to recommend Product A or $20 to recommend Product B to you, which one do you think the Advisor will choose from? 99.9% will choose Product B as it puts more money in their pocket. See why this is not the standard you want your Advisor operating under?

All those who have worked with me can attest to the loyalty I feel towards my clients. I won’t bend to the pressure of industry norms or to unethical behavior to make an extra buck. When I signed the CFP® Board’s Code of Ethics and Standards of Conduct, I took each and every word to heart. So much so, that I can say that I have left multiple firms when I felt that I could no longer uphold these obligations. One of the main reasons I launched Empowering Finance is so I am never put in a position like this again, where I have to choose between my integrity towards my clients or my paycheck. I will choose my integrity every time. 

“One of the truest tests of integrity is its blunt refusal to be compromised.”— Chinua Achebe

“Real integrity is doing the right thing, knowing that nobody’s going to know whether you did it or not.” – Oprah Winfrey