When it comes to managing finances, many people turn to a financial advisor for guidance. However, some may not be aware that there are certain obligations that advisors have towards their clients. These obligations are known as fiduciary obligations and they play a crucial role in protecting the interests of clients.
In this article, we will discuss five obligations of fiduciaries that you should know about.
1. Acting in the Best Interest of Clients
Fiduciaries are legally bound to act in the best interest of their clients at all times. This means that they must always prioritize the client’s interests above their own or any other party. This obligation ensures that the advisor is always working towards achieving the client’s financial goals and not their gains.
2. Full Disclosure of Information
Fiduciaries are required to provide full and accurate information to their clients regarding all aspects of their investments. This includes any potential risks, fees, or conflicts of interest that may arise.
3. Duty of Care
Fiduciaries have a duty of care towards their clients which means they must exercise reasonable care and skill when managing their client’s investments. This includes conducting thorough research, monitoring the investments, and making timely adjustments as needed.
4. Confidentiality
Fiduciaries are also obligated to maintain confidentiality regarding their client’s personal and financial information. This ensures that the client’s privacy is protected and sensitive information is not disclosed without their consent.
5. Avoiding Conflicts of Interest
Fiduciaries must avoid any conflicts of interest that may arise between their interests and those of their clients. If a conflict does arise, the fiduciary must disclose it to the client and take appropriate actions to address it. This obligation ensures that the advisor is always acting in the best interest of their clients.
Work with a Financial Advisor
Having a trusted advisor by your side can make a big difference. By working with a fiduciary, you can be sure that your interests are being taken care of and that you have someone to guide you in making important financial decisions.
Financial advisors also have extensive knowledge and expertise in managing investments, creating financial plans, and providing valuable advice.
Aside from fulfilling their fiduciary obligations, financial advisors also have access to a wide range of resources and tools that can help you achieve your financial objectives. They can also provide ongoing support and guidance as your needs and goals evolve.
At Cold Harbor Financial, our mission is to address not only retirement but every aspect of your financial life. Our team has been providing professional guidance and personal client service to individuals and institutions since 1990.
Contact us today to learn more about how we can help you.
Please note, changes in tax laws or regulations may occur at any time and could substantially impact your situation. While familiar with the tax provisions of the issues presented herein, Raymond James Financial Advisors are not qualified to render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional.
Opinions expressed in the attached article are those of the author and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.
All investments are subject to risk, including loss. There is no assurance that any investment strategy will be successful. Asset allocation and diversification does not ensure a profit or protect against a loss. It is important to review the investment objectives, risk tolerance, tax objectives and liquidity needs before choosing an investment style or manager.
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