What is a Fiduciary?

Fiduciary. These days, the word seems to be floating around every media outlet that talks about investing or financial planning. But what does it mean? And why is it important?

This is the short answer: a fiduciary is someone who always puts clients’ interests before their own.

To me and everyone at Christopher Street Financial, that seems like common sense. But as we’ve seen through a host of scandals with bad actors across the finance industry, not everyone sees it as so obvious. That’s a sad fact that has put a lot of focus on setting expectations for “fiduciary duty”.

The CFP Board has long been a leader in defining what it means to be a fiduciary. As a CFP® professional, I have an obligation to follow these and other standards. Everyone at Christopher Street Financial is committed to these principles.

As a CFP® professional and a fiduciary, I have a duty of loyalty. I must put the interests of my clients before my own or those of Christopher Street Financial. In every way and always, the client comes first.

I must also avoid potential conflicts of interest. If they exist, I must disclose them clearly. Every recommendation or decision I make on a client’s behalf must be made without regard for my personal financial interest.

And I have a duty of loyalty. Every recommendation I make is done with care, skill, prudence, and diligence. I am always thinking of my clients’ individual goals, view of risk, objectives, and personal circumstances. I must understand how all of these pieces come together as part of a client’s ‘big picture’. As a fiduciary, the weight of understanding is on my shoulders, and I need to make sure that clients understand their big picture with regard to decisions about their money.

Here’s a simple example: As your financial advisor, I may recommend that you purchase an annuity to help with cash flow in retirement. I would only recommend this if I believed it was a decision made to fit your needs. I have an obligation to make sure that you understand why it is being recommended and how it works. I have an obligation to let you know that the firm may be paid a commission if you purchase the annuity. But the recommendation must be made without consideration for that payment (it’s worth noting that this is why everyone at Christopher Street Financial is paid a salary rather than on commission).

Financial planning can often feel overwhelming. There are so many laws and rules about accounts, taxes, breakpoints, deadlines… for most people, it is nearly impossible to keep up with it all while trying to live a life that doesn’t center around personal finance. This is why we believe everyone can benefit from working with a financial planner. When acting as a fiduciary, our advisors stay current, from tax and estate laws to changes in investment options. Understanding these intricacies gives us the ability to find solutions that fit your needs and goals, and equally importantly, to show you those options and empower you to make choices that work for you. And if we don’t know something, we have an obligation to find out. We would never speak beyond our expertise.

At Christopher Street Financial, our advisors' commitment to act as fiduciaries infuses everything they do.  We will always put your needs ahead of what may benefit us. Equally important, we will ensure that you understand the big picture to make informed decisions to fit your personal needs. This is what it means to be a fiduciary. And this is at the heart of everything we do at Christopher Street Financial.

The Fiduciary Duty standard of care applies to investment advisory services and includes duty of care for duration of advisory-client relationship. Other standards may apply in certain circumstances. Fiduciary standards or fiduciary duties do not apply, for example, when offering insurance or brokerage products/services. Please see advisor's Client Relationship Summary (form CRS) for scope and terms of relationship. www.kestrafinancial.com/disclosures