When it comes to handling financial matters, nobody likes to give up control so easily. People want to be double sure before turning over the reins to someone who knows exactly what to expect. Considering the rise in the number of mismanaged financial affairs, this should not be surprising as well. The problem is—there are times when individuals, such as people in property management are not capable of handling their financial affairs and looking for someone who is not only reliable but capable of handling their responsibility. This is where the role of a professional fiduciary is crucial.
What is a Fiduciary?
A fiduciary is a trustee—a person or a legal entity—that is hired by an individual to act in their best interests. Obligations extend beyond just managing the financial affairs, the fiduciary continually monitors the person’s investments and financial situation, and adheres to best practices of conduct for the duration of the relationship. Fiduciaries also manage the care, the safety, and the general well-being of the person for who they are responsible.
Someone who is incapable of handling their own affairs, they usually require a competent and ethical fiduciary. For example, people in property management who are no more capable of handling their own financial affairs and also don't have any close friends or family members willing to do the same, hiring a professional fiduciary can be of great help and offer peace of mind.
Difference between a Fiduciary and a Financial Advisor
A fiduciary and a financial advisor acting under a suitability standard function differently. The main difference between the two is the decision-making process. Before making a recommendation, fiduciaries usually undergo a prudent process meant to determine their client's best interest. After making a recommendation, fiduciaries discuss it thoroughly with their client to ensure there's no room left for misunderstanding. Financial advisors are not required to have such long and thorough discussions. Once the trade is placed, their duty ends. Financial advisors aren't obligated to monitor their client’s accounts or financial situations on an ongoing basis.
The Need Of Hiring a Professional Fiduciary
Though family members, friends or CPAs can also be asked to take on the task of handling personal and financial affairs, it's often a better idea to hire an independent third party that has the experience and expertise in it— a professional fiduciary! Hiring a professional in the area allows you to protect yourself from financial abuse and also avoid conflict between your loved ones.
What is a Fiduciary?
A fiduciary is a trustee—a person or a legal entity—that is hired by an individual to act in their best interests. Obligations extend beyond just managing the financial affairs, the fiduciary continually monitors the person’s investments and financial situation, and adheres to best practices of conduct for the duration of the relationship. Fiduciaries also manage the care, the safety, and the general well-being of the person for who they are responsible.
Someone who is incapable of handling their own affairs, they usually require a competent and ethical fiduciary. For example, people in property management who are no more capable of handling their own financial affairs and also don't have any close friends or family members willing to do the same, hiring a professional fiduciary can be of great help and offer peace of mind.
Difference between a Fiduciary and a Financial Advisor
A fiduciary and a financial advisor acting under a suitability standard function differently. The main difference between the two is the decision-making process. Before making a recommendation, fiduciaries usually undergo a prudent process meant to determine their client's best interest. After making a recommendation, fiduciaries discuss it thoroughly with their client to ensure there's no room left for misunderstanding. Financial advisors are not required to have such long and thorough discussions. Once the trade is placed, their duty ends. Financial advisors aren't obligated to monitor their client’s accounts or financial situations on an ongoing basis.
The Need Of Hiring a Professional Fiduciary
Though family members, friends or CPAs can also be asked to take on the task of handling personal and financial affairs, it's often a better idea to hire an independent third party that has the experience and expertise in it— a professional fiduciary! Hiring a professional in the area allows you to protect yourself from financial abuse and also avoid conflict between your loved ones.
No comments:
Post a Comment