Is Your Advisor a Fiduciary?

by | May 5, 2021 | Videos

Do you know if your advisor has your best interest in mind at all times? If your advisor is a fiduciary, you can be certain that they do. In this video, Tom explains how not every advisor is a fiduciary, and why it’s so important to make sure you’re working with one.


Show Notes

‘Why You CAN’T Be a Fiduciary with a Series 7 License’ – Michael Kitces – Nerd’s Eye View

Is Your Advisor a Fiduciary? – Transcript

Tom Mullooly: In episode 244, we talk about fiduciary responsibility.

Welcome to the Mullooly Asset Show. I’m your host, Tom Mullooly and this is episode number 244, thanks for tuning in. I want to talk for a moment or two about fiduciary responsibility. Why should you be working with someone who’s a fiduciary and why it’s a shame, that more folks in our line of work aren’t fiduciaries. We have people who come into the office or contact us. They want to work with us.

Many of them start out by saying something along the lines of, “I just want to be sure that we’re going to be okay once we stop working.” They want to be sure that they’re going to be okay. That’s why when you go to our website, that’s the first two words you’re going to see, be sure.

So please understand that an investment advisor, not a financial advisor, an investment advisor has a fiduciary responsibility. If you don’t know if your advisor has a fiduciary obligation to you ask, just ask the question. Investment advisors, they have a fiduciary responsibility. Financial advisor may or may not. But a fiduciary always acts in the best interest of you, our client.

It’s really important to understand that. And it’s unfortunate that everyone in our industry is not a fiduciary. TD Ameritrade had a very, very famous survey that they put out where they learned that more than 70% of investors mistakenly thought that their broker, their financial advisor, already was a fiduciary, when in reality, they’re not.

So I recently read a story where an individual with a CPA license was interviewing to become a financial advisor. Along the way, this person was told that they were going to need to let their CPA license lapse, if he wanted to become an advisor. Why? Think about it.

A CPA is a fiduciary. Think about that. They didn’t want him to work there as a fiduciary. So understand, fiduciary, a big term, basically means you’re going to do the right thing for your client, in all cases, a fiduciary needs to do something that some salespeople won’t do, and that’s tell the truth, all the time.

I recently went car shopping, couldn’t really decide between a blue car and a red car, both pretty similar, but I was told in the same 10 minute span that, “Blue really is your color.” But I also heard that, “Gee, that red car really is sharp, isn’t it?” And then I also heard, “So, can you see yourself parking that in your garage tonight?” Salesmen lines.

So contrast that with a 60 year old, who comes into our office, who wants to stop working. A person who wants to start to travel and travel a lot and a person who may or may not have enough assets, enough money to really make it all work and live until they’re 95 years old.

A fiduciary is going to tell that guy or gal the truth. The truth is, maybe they want to think about working a few years more. You really need to be working with a fiduciary when it comes to these sort of things. They’re going to be on the level with you. They’ve got an obligation to tell you that.

They’ve also got an obligation to know your situation before they can go ahead and make recommendations. Make sure you ask if your investment advisor, your financial advisor, is a fiduciary. That’s the message for episode 244. Thanks again for tuning in.

Don’t forget to check out the Mullooly Asset Podcast as well!

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