Most Popular ArticlesNovember 3, 2009
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The issue of fiduciary responsibility remains at the center of controversy, as regulators debate whether broker-dealer registered representatives should fall under the constraints of fiduciary responsibility. I believe they should - the fiduciary standard of conduct is necessary to properly align investors’ interests with those of the advisors who serve them. Moreover, the fiduciary standard of conduct is not onerous and should not be feared. Advisors who embrace a fiduciary standard of conduct must simply follow the guidelines set forth below.
I am a "Fiduciary"
I am a fiduciary financial advisor.
My clients place their trust and confidence in me.
I realize that, regardless of what statutes and regulations may or may not require of me (as a representative of a broker-dealer firm, insurance company, or RIA), I am a fiduciary under state common law because of the relationship of trust and confidence formed between me and my clients. As such, I possess broad duties of due care, loyalty, and utmost good faith toward my clients.
I shall act with due care
At all times, I exercise due care and provide prudent advice.
I am knowledgeable as to the advice I provide.
I follow a prudent process, and at each step I exercise good judgment.
Any investment strategy I promote is based upon my objective analysis.
The process I use to recommend an investment strategy either is substantiated by extensive back-testing or possesses strong academic support. If neither is present, and my investment strategy is novel, I disclose this fact to my client along with all of the risks of the strategy.
I conduct extensive due diligence before recommending any specific investment or insurance product.
I carefully assess the circumstances and objectives of each client, both at the outset of the relationship and periodically throughout its term.
But I claim neither prescience nor omniscience. I am not a guarantor of my client’s returns.Display article as PDF for printing.
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