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5 Questions You Should Ask Your Financial Advisor

Mark Zaifman   |    Thu, Nov 14, 2013 @ 09:01 AM


The following definition of ‘fiduciary’ is taken from the Center for Fiduciary Studies, fi360 website:

"An investment fiduciary is someone who is managing the assets of another person and stands in a special relationship of trust, confidence, and/or legal responsibility. The word “fiduciary” comes from the Latin word “fiducia,” meaning “trust.” An investment fiduciary is held to a standard of conduct and trust above that of a stranger or of a casual business person due to the superior knowledge and/or training of the fiduciary."

In the past, I've written a couple of blogposts about the various financial designations one can encounter in the alphabet soup of the financial services field. But as an investment manager, being a fiduciary is a very important designation to understand. The following list of five questions you should ask your advisor is taken from the Center for Fiduciary Studies, fi360 website.

Five Questions You Should Ask Any Advisor

Some advisors always operate in a fiduciary capacity, others only act as a fiduciary for certain specified services, and yet others are not permitted by their company to take on the obligations of a fiduciary at any time. In order to better understand the standard of care your advisor is providing you, ask the following questions:

1. Will you put my best interests above all others?

2. Will you act with prudence; that is, with the skill, care, diligence and good judgment of a professional?

3. Will you provide conspicuous, full and fair disclosure of all important facts?

4. Will you avoid conflicts of interest whenever possible?

5. Will you fully disclose and fairly manage, in my favor, unavoidable conflicts?

An advisor should be able to provide clear and concise answers to all of those questions and be willing to disclose that information in writing. In addition, any AIF® Designee should be able to describe how their relationship with you will operate and list the resources and tools that are incorporated into their business practices.

If you have any questions about my role as a fiduciary and what you can expect in our work together, please feel free to contact me - I'd be happy to illustrate the benefits of working with an AIF designee.


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