Why being a Fiduciary is so important?
Jun 30, 2019
Have you ever heard the word fiduciary? Have you ever heard anyone saying that before you speak with a financial advisor or anyone about finances, make sure that he/she is a fiduciary?
If you had, then keep reading. If you haven’t keep reading too because I am going to explain what that means.
Here is the definition that Investopedia have for a Fiduciary:
"A person or organization that acts on behalf of another person or persons to manage assets. Essentially, a fiduciary owes to that other entity the duties of good faith and trust.
A fiduciary requires being bound ethically to act in the other’s best interest."
Anyone that is acting as your financial advisor or that is helping you with your finances requires a high level of ethics and above all, having your best interest in mind.
Why is this important?
First, because we are talking about money.
Second, because trust should go both ways. If a client is trusting anyone with their money and their finances, that person is responsible to reciprocate that trust as well.
Everything in our lives has a close relationship with money. If you don’t think so, just think about your daily basic needs, food, and water among others.
When you work for a financial company you normally have quotas. How do you think a financial advisor is going to feel when their boss tells them that they need to fulfilled their quotas or they will lose their job? Do you think that this person is going to be thinking about someone’s family or his family? That’s when some people stop being a fiduciary.
This is what happened at Wellsfargo in 2018 when they got caught. His employees needed to hit quotas, and they opened fake accounts. Unfortunately, Wellsfargo just got fined for 1.2 billion. This is just a slap in the hand.
As a Financial Coach, I am fiduciary. I don’t care about competitions winning competitions, quotas or bonuses. My job is to find the best options that fits your needs, even if that means not making much money.
I actually have found that some of the best financial options are the ones that don’t pay Management fees to the Financial Advisors.
Today there is a small percentage of people that would trust financial advisors.
GET INFORM, do your research.
It doesn’t matter if they are fiduciary or not, statistics show that only 10% of Americans trust financial advisors. Why? Because they have seen that a lot of them are not working towards their best interest. Clients has trusted them to manage their money and to their surprised their investment has gone down specially due to the many management fees.
Financial Advisors want you to give them your money so they can manage it. They don’t want to teach you or educate you about the bests ways to grow your money, tax exempt and fee free, because that is how they make their money.
What is the difference between a financial advisor and a financial coach?
A Financial Coach will educate you about taking charge of your money and the necessary concepts so you can achieve success and financial freedom.
As a Financial Coach, I am not the typical Financial Advisor. My teaching methods can be consider unorthodox, controversial, and revolutionary.
This is why I want you to go and discover the path of financial freedom. In the end, a fiduciary is someone that has heart.
Visit my website: www.financebabe.com
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