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What is a Fiduciary Standard?
What the Fiduciary Oath means to you - the client
Why is a Fiduciary Standard Important?
NAPFA FIDUCIARY OATH
The advisor shall exercise his/her best efforts to act in good faith and
in the best interests of the client. The advisor shall provide written
disclosure to the client prior to the engagement of the advisor, and
thereafter throughout the term of the engagement, of any conflicts of
interest which will or reasonably may compromise the impartiality or
independence of the advisor. The advisor, or any party in which the
advisor has a financial interest, does not receive any compensation or
other remuneration that is contingent on any client's purchase or sale of
a financial product. The advisor does not receive a fee or other
compensation from another party based on the referral of a client or the
client's business.
- A financial advisor held to a fiduciary standard occupies a position
of special trust and confidence when working with a client. As a
fiduciary, the financial advisor is required to act with undivided
loyalty to the client. This includes disclosure of how the financial
advisor is to be compensated and any corresponding conflicts of
interest.
- -The National Association of Personal Financial Advisors (NAPFA)
What the Fiduciary Oath means to you - the client
- I shall always act in good faith and with candor.
- I shall be proactive in my disclosure of any conflicts of interest that
may impact you. - I shall not accept any referral fees or compensation that is
contingent upon the purchase or sale of a financial product.
Why is a Fiduciary Standard Important?
- A fiduciary standard provides for:
- Trust
- Confidence
- Reliability
- Client-Centered Approach
- Prudent Advice and Guidance
NAPFA FIDUCIARY OATH
The advisor shall exercise his/her best efforts to act in good faith and
in the best interests of the client. The advisor shall provide written
disclosure to the client prior to the engagement of the advisor, and
thereafter throughout the term of the engagement, of any conflicts of
interest which will or reasonably may compromise the impartiality or
independence of the advisor. The advisor, or any party in which the
advisor has a financial interest, does not receive any compensation or
other remuneration that is contingent on any client's purchase or sale of
a financial product. The advisor does not receive a fee or other
compensation from another party based on the referral of a client or the
client's business.
