Fiduciary- A fiduciary is a person or entity that holds a legal or ethical relationship of trust

In the investment advisory world fiduciaries are required to act in your best interest, regardless of what they stand to gain or lose.

Many assume that all financial advisors are fiduciaries. Unfortunately, this couldn’t be further from the truth as financial professionals act under two very distinct sets of guidelines.  The world of investment advice is plagued with conflicts of interest, obscure disclosures and an overall lack of transparency. It can be very difficult to tell them apart.

Seeking out an investment advisor who will act as your fiduciary can help to eliminate many of the problems associated with commission-oriented, product focused salespeople.  A fiduciary is required, by law, to give full disclosure of how they are paid as well as any conflicts of interest they may have, before you do business with them, you as the consumer are in a better position to make an informed decision.

The Fiduciary Duty

  • Put clients’ interests first
  • Act in utmost good faith.
  • Act prudently.
  • Avoid conflicts of interest.
  • Fully disclose material facts.
  • Control investment expenses


                                          Fiduciary Duty vs. Suitability Standard

If you go to a stockbroker for investment advice, the broker may recommend that you invest in a particular fund (Fund A) even though there is another fund (Fund B) that may be a better choice. The suitability standard permits the broker to recommend an inferior investment fund because it gives them a higher commission (as long as it’s still a “suitable” investment).

On the other hand, fiduciary financial advisors are required to recommend you invest in Fund B since it’s your best option and they have a fiduciary duty to clients.

Martin Financial Group will act as a fiduciary and will follow the fiduciary duty to act in your best interests.