Simple Definition of Fiduciary

A fiduciary is obligated to give you advice that is in your best interest. Yeah….I know…..who wants advice that is not in their best interest? Sometimes in our lives we don’t want what’s in our best interest, but when you walk into the office of a Certified Financial Planner® you should not expect anything less than fiduciary care.

So when do we want something that is not in our best interest? When we visit a bar, lottery terminal, racino, donut shop, or even a discount broker. In our opinion, when you buy that hot stock online your odds are probably better than the lottery terminal, but not much. Moreover, as long as you answer a few questions correctly on your new account screen, your discount broker will let you buy that hot stock.

We feel consumers should be allowed to buy what they want, but true “professionals” cannot deliver whatever the customers want. Professionals deliver advice. It seems to us that the only kind of advice worth paying for is fiduciary advice, delivered in the best interests of the person receiving it.

If one is seeking advice about anything, we expect advice that is best for us. We are not seeking advice that could be harmful. My doctor does not prescribe any medication I request, my CPA does not let me use any idea I have to reduce my taxes, so why would I expect my Certified Financial Planner® to let me invest in something that has little chance of helping me reach my goals?

Fiduciary in the News

Those of us in the financial advice industry are witnessing some changes as it relates to being a fiduciary. In a nutshell the Department of Labor has released new sets of rules as they relate to giving advice to customers with IRA accounts. IRA accounts come under the purview of the Department of Labor because the DOL oversees the laws pertaining to IRA accounts. Like any new regulation, it is having some intended and some unintended impacts on our industry. A fair amount of confusion and misunderstanding surround the new rules, but that will be sorted out in time.

Even with these changes, the main point for the consumer is the difference between seeking advice from a fiduciary or buying something from a salesperson/online broker. If one wants advice seek out a professional adviser (preferably a Certified Financial Planner®). If you don’t want advice there will still be places that will indulge your purchase of that hot stock or fund.

The new fiduciary rules are a good start to help the public get better advice. However, it has been our experience (and probably yours) that just because a salesperson is told they are now a fiduciary, they don’t just change their thought processes and habits overnight. The evolution of a profession takes time.

How do you know if you are sitting in front of a fiduciary or a salesperson? Do they ask you a lot of questions, formulate a plan, and look at the big picture of your family’s finances? Or do they focus on what they want to sell you? The feeling in the pit of your stomach may be your best guide.

Fee-Based Planning offered through W3 Wealth Advisors, LLC – a State Registered Investment Advisor – Third Party Money Management offered through ValMark Advisers, Inc. a SEC Registered Investment Advisor – Securities offered through ValMark Securities, Inc. Member FINRA, SIPC – 130 Springside Drive, Suite 300 Akron, Ohio 44333-2431 * 1-800-765-5201 – W3 Wealth Management, LLC and W3 Wealth Advisors, LLC are separate entities from ValMark Securities, Inc. and ValMark Advisers, Inc.

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