Trust in banks and the financial system in general is at historic lows. The Dow Jones Industrial Average dropped 700 points in just ten minutes on May 10, 2010. Since the Great Recession started in mid 2007, over two trillion dollars of wealth has evaporated. According to the Conference Board, consumer confidence in 2009 plunged to an all-time 41-year low. Market research into the continuing turmoil has discovered that 86 percent of investors are thinking twice about their financial advisors.
If you are looking for advice in today’s uncertain market, look for an advisor who is a fiduciary. What does it mean to be a fiduciary? When you are a fiduciary, you put the needs of your clients ahead of your own–in all cases.
According to Professor Steven Blum, a business ethics professor at the Wharton School, acting as a fiduciary encompasses both a “duty of care and a duty of loyalty.” He insists that our industry embrace a new definition of a professional, noting, “A true professional uses his or her ability and power solely to advance the best interests of the client. When the professional’s interests diverge from those of the client, the professional always follows only the client’s interests.” That’s a definition, I have embraced since day one in the business and one I hope will soon be more widely practiced. The investing American public deserves nothing less.
If you want to read more on this topic, read my article titled “Defining My Fiduciary Standard“ by clicking on the title.