Tuesday, October 16, 2007


fi·du·ci·ar·y [fi-doo-shee-er-ee, -dyoo-]
Law. a person to whom property or power is entrusted for the benefit of another.

Law. of or pertaining to the relation between a fiduciary and his or her principal: a fiduciary capacity; a fiduciary duty.

What does "fiduciary" have to do with financial planning? A lot! The actions of the person holding the fiduciary capacity (e.g., a financial advisor) must ALWAYS put the client's interests first. ALWAYS.

A Registered Investment Advisor (or a Investment Advisory Representative of a Registered Investment Advisor) has a fiduciary relationship with his or her clients. A fiduciary relationship creates a legal obligation to put the client's interests ahead of the advisor's in all circumstances.

Ask a prospective financial advisor if they will have a fiduciary obligation to you.

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