Fiduciary Standards

Why are fiduciary standards so important?

• "Most people select a financial advisor on the basis of a personal meeting, personal interaction, likability, location or brand name recognition. Those factors have nothing to do with an advisor's competence, ethics or legal standards of conduct." (Jack Waymire, Founder of the Paladin Registry, an independent rating service for financial advisors) .

• "People would never buy a product or service without knowing the cost.  Yet when it comes to financial advice, they do it every day.  Do they really believe advice from a commissioned salesperson is free? The only thing more expensive than 'free advice' is advice that's not in your best interest.  Ask your advisor to put in writing how much he gets paid for his advice.  Then ask him to state in writing that he is acting as a fiduciary and putting your interests first.  Finally, ask him to sign the document.  Actions speak louder than words." (Bob Schumann, co-founder)

• "Fiduciary is the highest legal standard of care. If the most important factor in your choice of an advisor is TRUST, then your decision becomes much easier. A fiduciary standard is the legal right to trust. It's your legal guarantee that the advisor can be trusted to put your interests ahead of his own. That's why advisors who sell products are forbidden by their compliance departments from taking a fiduciary position." (Larry Soukup JD, co-founder)

• "Assume you have a choice between two identical used cars, both for the same price, with the only difference being that one car comes with a warranty. Which car would you choose? Advice from a fee-only, fiduciary advisor comes with a legal warranty that the advisor is putting your interests ahead of his own." (Bob Schumann, co-founder)

• "Our Founding Fathers would not adopt the US Constitution without a Bill of Rights.  Legal rights are valuable. In contract law, a party who surrenders a legal right is usually compensated by the other party.  People who work with an advisor who is not a fiduciary, should be paid by the advisor for surrendering one of their most important and valuable rights – the legal right to trust the financial advisor." (Bob Schumann, co-founder)