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fiduciary

adjective

LAW

  1. 1.

    involving trust, especially with regard to the relationship between a trustee and a beneficiary.

    "the company has a fiduciary duty to shareholders"

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FIDUCIARY vs. SUITABILITY

Do you receive financial advice to the Fiduciary Standard of Care or the Suitability standard?  It's important to know.

Deciphering the "What's What" and "Who's Who" of today's complex financial services industry can be difficult, even for the most financially sophisticated members of the general investing public.  Two words: Fiduciary and Suitability, are critical in order to understand the motivation behind the person offering you financial products or advice.

Recognizing the difference between the fiduciary and suitability standards may also help you to appreciate the level of care you receive from a trusted financial advisor.  Although the distinction between the fiduciary and suitability methods of offering advice is rarely discussed by "broker-led" large financial companies, we feel it is essential for investors to know the difference.

BROKER

(the suitability standard)

  • Offers products for sale from a range of products carried by the company he or she represents

  • Is paid commissions calculated as a percentage of the amount of money invested into the product

ADVISOR

(the fiduciary standard)

  • Offers "best interest" taking into account the needs of each individual client

  • Is paid a quarterly fee calculated as a percentage of the assets under management

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