Our Fiduciary Commitment to Put the Best Interests of Clients First

“Put the investor first. It’s not that complicated,” says Jack Bogle, the founder of Vanguard and a leading fiduciary advocate.

Bogle made these types of comments again, speaking at a recent press conference hosted by The Institute for the Fiduciary Standard.

During this event, which we attended with Bogle, the Institute named Fiduciary Wealth Partners as a member of the founding class of firms that have agreed to conduct themselves according to its “Best Practices: Professional Conduct Standards.”

Here’s why we think it matters to our clients and all investors:

The Institute’s Best Practices clarify exactly what it means to “put the investor first” and how you can identify whether you’re working with a fiduciary, who puts your best interests first.

At Fiduciary Wealth Partners (FWP), we are proud to commit to the Institute’s Best Practices for Professional Conduct. We believe these third-party standards further define how we can deliver Transparency, Simplicity, and Peace of Mind® to our clients.

Not All Fiduciaries are Created Alike

“Put the investor first” is a principle. It sounds good. It’s clearly the right thing to do. But it’s subject to interpretation. The words might mean one thing to one firm and something completely different to another.

This is clear: Not all wealth managers deliberate about what it means to “put the investor first.” Nor do they routinely scrutinize their own behavior for delivery on the promise.

In a recent study, the CFA Institute interviewed more than 200 investment management leaders and surveyed approximately 3,300 investment professionals. Researchers found that:

  • Only 28% of respondents report staying in the investment industry to help clients.
  • Another 36% believe that acting in their clients’ best interests implies taking on career risk.

The implication is clear. You might think you’re dealing with a fiduciary, but the CFA’s findings suggest you could be working with an advisor who is not focused on your best interests (please click here to read a story that our Managing Partner, Preston McSwain, wrote on this subject that was published by the CFA Institute).

Best Practices Define What to Expect from Fiduciaries

At FWP, we constantly assess what actions are mission critical to putting investor interests first. Prior to committing to the Institute’s Best Practices, we had already pledged the following fiduciary practices to our clients:

  • We don’t accept any payments from any investment firm (“pay to play”) or have any fee sharing arrangements of any type with an outside firm.
  • We don’t have arbitration clauses in our agreements
  • All performance is calculated by independent third parties
  • We are not affiliated in any manner with a third-party investment firm, broker-dealer, or custodian.
  • No outside firm has any ownership interest in our firm.
  • We don’t accept gifts from any third-party vendor or provider of any product or service.
  • We have given up the securities licenses that would allow us to take commissions from the sale of an investment fund, product or security.

Related to this last point, as Preston McSwain, the Founder of Fiduciary Wealth Partners says, “If we are honest with ourselves, it is the lack of opportunity that often keeps us out of trouble,”and by not being registered with a broker-dealer, FWP can’t accept commissions for the sale of a product or security to our clients, 12b-1 selling incentive fees or participate in “pay to sell” product offering schemes that are quite common on Wall Street.

We are proud of our fiduciary standards, but we respect the fact that independent third parties sometimes identify specific behaviors that improve what we are already doing and clarify what it means to “put the investor” first.

With this new set of fiduciary standards, FWP has formally updated our SEC advisor ADV form. It serves notice that we will now be governed by and held accountable to the Best Practices that Knut Rostad, the President of the Institute for the Fiduciary Standard, says, “demonstrate that [advisors] deserve clients’ trust, with guidance that is distinguished by clarity, transparency and honesty in both word and deed.”

Best Practices Show How You Can Identify Fiduciaries

The Institute released its list of 12 Best Practices on March 17, 2017, and FWP was one of the first advisers in the nation to subscribe. Hopefully these standards supported by top industry leaders such as Jack Bogle will create a blueprint that investors can use to evaluate whether wealth managers are putting their interests first.

To see the full list of Fiduciary Best Practices, to which FWP has subscribed to further our commitment to transparency, please click on the following link:

Our Fiduciary Standards

If you have any questions about fiduciary best practices or know of anyone who might have doubts about an investment advisor’s commitment to fiduciaries best practices, please call us at (617) 602-1900 or email Preston McSwain at preston@fwp.partners.

Perhaps Fiduciary Wealth Partners can help. If not, or if we feel that you are currently in good fiduciary hands, we’ll tell you.

More of our views on this subject can also be found by clicking on the following:

Transparency:  Does the Industry Protest Too Much?