Most Popular ArticlesNovember 3, 2009
I am a professional; I will at all times adhere to my professional obligations
I possess a high degree of knowledge about financial planning and/or investments.
Because of the huge knowledge gap between me and my client, my clients place their trust in me to represent their best interests.
While I shall encourage and promote efforts at financial literacy, I understand that the vast majority of my clients will never attain the requisite knowledge to negate the need for my advice.
I understand that disclosures, whether they be of the attributes of a product or of various conflicts of interest, are insufficient in and of themselves to meet my obligation as a fiduciary, as my clients possess various behavioral biases that limit their ability to undertake sound decisions, even with disclosures.
While I may at times limit various specifics as to the scope of my engagement by the client, I will never attempt to negate my broad duties of due care, loyalty, and utmost good faith which I owe to the client.
I realize that many of my fiduciary responsibilities cannot be negated by contract with my client (such as ascertaining and affirmatively disclosing all of the fees and costs of investment products I recommend, or making plans and decisions with an eye toward minimizing income taxes long-term).
I realize that fiduciary status, once achieved, is “sticky” with respect to each client, and that clients are unlikely to request any change to a non-fiduciary relationship. Nor would a change to an arms-length relationship likely be in my client’s best interests (hence, in accordance with my duty of loyalty to my client, I shall not recommend such a change). Accordingly, I will not seek to relieve myself or my firm of our fiduciary obligations to the client, except in very rare and compelling circumstances.
In the rare case that a need arises to abolish a fiduciary relationship, I will ensure that the provision of any advice of a financial planning or investment nature ceases completely, and that the client’s best interests are served by such a change.
At all times during the course of my relationship with my client, I recognize that I am primarily the representative of my client.
My fiduciary obligation to my client is paramount and supersedes any obligations I may owe to my firm or to the product manufacturers that my firm may represent.
I am a professional. I will never betray the trust and confidence my clients bestow upon me.
The foregoing was formulated by Ron A. Rhoades, J.D., CFP®, Chief Compliance Officer, Joseph Capital Management, LLC. Each statement above is based upon fiduciary law as found in various judicial and administrative decisions. These statements do not necessarily reflect the views of any organization to which the author may belong. For more insight into fiduciary law as applied to the provision of financial planning and investment advice, visit www.fpcompliance.com.
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