When it comes to managing your money, trust is everything. That’s why today’s question is one of the most common and important ones we receive: What is a fiduciary?

In this week’s Money Wisdom Question Series, Ian Fergusson, RICP® offers insight into what this term really means and why it matters.

Defining “Fiduciary”

A fiduciary is an individual who has a legal, moral, and ethical obligation to act in the best interests of another person or entity. In the financial industry, this means acting as a trusted caretaker of a client’s assets and prioritizing their needs when giving advice or making financial decisions on their behalf.

Fiduciaries vs. Other Financial Professionals

Not every financial professional is a fiduciary. There are many in the industry who operate under different standards, such as insurance agents, stockbrokers, and financial sales representatives. These professionals are often held to what’s known as a suitability or best interest standard. This means they are required to recommend products that are appropriate for you, but not necessarily the best option available for your long-term financial success.

For example, an insurance agent may recommend a policy that fits your needs, but if they aren’t acting as a fiduciary, they may not be obligated to consider whether another product would better support your overall financial picture.

Why Work with a Fiduciary?

As a partner in your financial journey, a fiduciary is obligated to put your best interests first and help you build a plan that reflects your personal goals. While many non-fiduciary professionals care deeply about their clients, they aren’t legally held to the same standard as fiduciaries, such as the advisors at Johnson Brunetti.

In our opinion, the fiduciary standard adds an extra layer of accountability. If you have questions or want to learn more about what it means to work with a fiduciary, we’re here to help.