What is a Fiduciary?

Posted by Greater Midwest Financial Group on Aug 10, 2021 10:30:00 AM

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Today we’re going to tackle one of the most common questions that clients are afraid to ask: what actually is a fiduciary?

This term is thrown out frequently when looking for financial advice, estate planning or retirement savings. There’s also a lot of misinformation and confusion about what a fiduciary does.

What is a Fiduciary?

We like this straight-to-the-point definition from NerdWallet:

A fiduciary is an individual who acts in the best interest of a particular person or beneficiary. Fiduciary financial advisors must only buy and sell investments that are the best fit for their clients. Fiduciaries have a bond of trust with clients and must avoid conflicts of interest.

In other words: a fiduciary is someone who someone who acts on the best interest of their client to make investments. This is most often financial in nature, but it doesn’t have to be – board members are often fiduciaries for their company but do not offer any financial advice at all.

Many fiduciaries are also financial advisors, but the two aren’t mutually exclusive. For example, a financial advisor who is NOT a fiduciary could recommend investments to their client that give them a bigger commission, even if they’re not the best fit for the client. A fiduciary would only recommend investments that are a best fit for the client.

How Do I Know if a Financial Advisor is a Fiduciary?

The best way to verify if a financial advisor is a fiduciary is to look at their credentials. The Certified Financial Planner® (CFP®) designation is awarded to financial organizations that have certified as fiduciaries. You can look up any individual to see if they have received this designation – all of our advisors at GMFG are required to obtain this designation.

At Greater Midwest Financial Group, we have always strived to do what is best for our clients. We don’t need regulations to tell us how we should treat our clients. Our founder has been a CFP® since 1987 and we require all our advisors to obtain the CFP® designation. So, we applaud the enhanced client protection rules. You should be able to trust that any advice you receive will be from dedicated and educated professionals. Why would you want less?

Our financial advisors at Greater Midwest Financial Group are committed to helping you balance your present and future finances so you can live comfortably and confidently well into the future.

Contact a Financial Advisor

Greater Midwest Financial Group is a financial advisor firm serving St. Paul, Minneapolis and the wider Twin Cities area. We specialize in wealth management, retirement planning, asset management and other personal finance needs.

Topics: fiduciary, financial literacy, financial advisor