“Does your financial advisor have your best interests in mind?”

The answer may seem obvious: why wouldn’t your financial advisor have your best interests in mind? Would you have hired them if they didn’t have your back in every investment decision? Unfortunately, many professionals who position themselves as wealth management ‘experts’, even some who carry official designations of a financial advisor, are not operating in their clients’ best interests.

Your financial future is too important not to have unbiased advice affecting your investment decisions. A term we often talk about at Full Circle Financial of Colorado is being a true fiduciary. A fiduciary is defined as “involving trust, especially with regard to the relationship between a trustee and a beneficiary.” (Oxford English Dictionary, July 2018)

As fiduciaries in the wealth management space, we value the trust our clients place in us to give them unbiased advice when it comes to investment opportunities. This is a trust we cannot put a price tag on, which is why we take every step possible to maintain our fiduciary commitment.

We work to build your trust from our first interaction. We want to make sure we’re a good fit, and we’ll be honest with you if we believe another firm may be a better fit for you. We also focus on acting as if our own money is at stake: if this were our portfolio, how would we want to be treated?

The Truth Behind Many Financial Advisors’ Recommendations

Other advisors in our space are choosing not to have that same commitment. Our team has heard story after story from new clients sharing about their previous experience with financial ‘experts’. One consistent story we hear is their previous financial advisor or insurance agent sold them into an investment that ended up generating little to no return.

After more questioning, we learn their advisor sold the investment because a higher compensation was attached that benefited the advisor. The investment type was not a good fit for the client’s financial goals, and in many cases, the investment product itself was not a quality product from the beginning.

Working through an independent broker/dealer is potentially a great value to you as the client. If a broker/dealer is independent, they have virtually zero bias regarding what investments are in your portfolio. They have the same fiduciary standards as your investment advisor. On the other, if the broker/dealer is also a market maker (simply stated, someone who owns securities), you may get the same type of advice, but it’s not clear if the advice the broker/dealer is giving you is in your best interest.

Here’s a simple example: you sell a security via your investment advisor and their Independent Broker/Dealer. You can know you received the best price at the time that the market allowed. If that same transaction occurs with a market maker Broker/Dealer, you get the price offered by the Broker/Dealer but it may not be the best price in the market at the time. The price may be close to the market’s best, but it’s not guaranteed.

Sadly, this is a common story affecting investors across the U.S. and beyond. This may be the primary reason why the U.S. Department of Labor instituted the Fiduciary Duty Rule based on the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code. (U.S. Department of Labor, July 2018) The Fiduciary Duty Rule essentially raised the bar of expectations for all professionals who work with financial investment plans or provide investment planning advice. In short, any financial professionals who met those conditions were automatically assigned the legal and ethical responsibility of being a ‘fiduciary’. (Obama White House Archives, February 2015)

The Fiduciary Duty Rule held any financial professional operating as an advisor to investors to a legal and ethical duty. This standard requires the professional to disclose relevant fees and commissions for any investment opportunity they recommend. The Fiduciary Duty Rule was designed to bring more transparency for the greater benefit of the investor. This ruling was a game-changer as preliminary projections showed financial service companies were poised to lose as much as $17 billion per year at the hands of fiduciary accountability. (Obama White House Archives, February 2015)

Unfortunately, the Fiduciary Duty Rule was ultimately vacated by the U.S. Fifth Court of Appeals with the official ruling in June 2018. (Investment News, June 2018) This is again opening up loopholes and zero accountability for many so-called financial ‘experts’ to recommend different investment types and opportunities with little to no benefit to the investor.

While the Fiduciary Duty Rule is no longer a looming requirement, our team at Full Circle Financial of Colorado believe in the value and calling of operating as a fiduciary. This was a principle we championed from our beginning, and it will continue to be an expectation we hold for all our team members.

As our lead investment advisor Mike Freemire shares, simply having a license to serve as a Registered Investment Advisor (RIA) requires our team members to act in our clients’ best interests, always and without fail. This is a foundational belief we hold to at Full Circle Financial of Colorado, and it starts with being more than just a fiduciary.

Our Concierge-Style Approach to Serving Our Clients

Think about the top hotels, resorts, even spas: they all have a concierge experience. From the moment your reservation is made, your concierge is attempting to predict your next set of needs.

If you’re staying at a resort, the concierge may ask you what food types you prefer, your favorite bottle of wine, or a memorable experience you want to make during your stay. A great concierge will then obsess over delivering on those wishes before you even realize their work is underway.

When it comes to creating the concierge-style experience for our clients, we try to think ahead of our clients’ needs:

  • What might they need next that they don’t yet realize they may need?
  • What are the questions they may ask at our next meeting that they may not know to ask now?
  • What are specific next-level details they are likely to focus on in the upcoming season of life, such as their children starting college or preparing for retirement?
  • Are there movements in the markets that require some conversations between our scheduled meetings? If so, what is each client’s preference; phone call, personal or general email, or face-to-face?

Creating content that proactively answers client questions allows us to serve our prospective and current clients around the clock.

Taking a concierge-style approach to our service means we are more selective with who we want to serve. It means a higher value of interaction that’s personalized because we don’t believe in ‘one-size-fits-all’ financial advice. Our team will care for you more than anyone else who doesn’t share your last name.

What’s Your Next Step?

If you want a financial advisor who’s been where you are and who will fight for your financial future, we would love to connect with you. Our Full Circle Financial team is ready to have a ‘zero-fear, no strings attached’ phone call with you to see if we may be a good fit.

You may not be ready to talk yet, and that’s okay. If you like this article and want to learn more, just send us a message to start a conversation. No calls necessary, just a message or two so you can get to know us a bit more before taking that first step.

You have a choice for who you let speak into your finances. Whenever you’re ready, we want to be the right choice for you.

Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Cambridge and Full Circle Financial of Colorado, Inc. are not affiliated.

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Full Circle Financial of Colorado