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November 27, 2013 at 09:32 AM
Last month, you learned that getting to trust fast requires two things: (1) being transparent and (2) acting as a fiduciary. You also learned that purchasing a background check on yourself is a powerful trust-building strategy, because it’s the best way to prove your record is beyond reproach.
However, this only gets you 50 percent of the way to trust. This month, I’d like to discuss how to earn the remaining 50 percent: becoming a fiduciary.
What’s a fiduciary?
It’s someone who places the client’s best interests first. According to the Certified Financial Planner Board of Standards, a fiduciary “acts in utmost good faith, in a manner he or she reasonably believes to be in the best interests of the client.” This also requires:
- Being loyal to your clients.
- Offering prudent advice.
- Avoiding (and disclosing) conflicts of interest.
In recent years, many agents have earned their Series 65 or 66 investment-advisory licenses (RIA). Their goal: mainly to acquire the legal right to review client investments in order to source funds for annuity purchases. But many have failed to realize that a Series 65 or 66 imposes a fiduciary standard of care. Are you fulfilling that standard or just using your investment-advisor license to grease your current business model?
And consider this: True fiduciaries treat their clients as if they were their parents. If you were advising your father and mother about their retirement income strategy, would you just recommend they buy a suitable annuity? No, you’d try to find the best possible solution (annuity or any other financial vehicle) that generates the income they need. Doing less would violate your fiduciary duty.
