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Fiduciary—Why Your Retirement Depends on this Word

fiduciary pen signature

The Webster’s dictionary of 1913 tells us that a fiduciary is someone “who holds a thing in trust for another, a trustee.” A fiduciary involves confidence or trust; confident; undoubting; faithful; firm; as in a fiduciary capacity. The definition still holds true today.

A fiduciary is held to a much higher moral standard than the crowd. Fiduciaries must place the interests of others before their own interests. Said another way, true fiduciaries serve the needs of others before they serve their own needs.

The fiduciary mind set defined in 1913 was not the state of mind that many of our “fiduciaries” practiced leading up to the Great Recession. The lack of strong fiduciary relationships was one root cause of the Great Recession. Self-interest prevailed—in banking, real estate, the stock market, and even government regulation. There was plenty of blame to go around. As a society, we lost our moral compass to look out for the other guy.

Fiduciaries don’t pay themselves large bonuses when their corporation or their clients lose large sums of money. Fiduciaries don’t place people in questionable investments just to make themselves a buck nor will they charge their clients exorbitant fees—especially when they lose large sums of money for their clients.

Fiduciaries inspire confidence, trust, and faith that they have your best interests at heart. They are more interested in your gain than personal gain. Fiduciaries take pride in building assets for others. They don’t bend to the financial speculative winds of the market and they do their best to live their stated financial values.

No economy in history has survived long term without adherence to fiduciary principles. History is full of examples of the negative consequences of breaking this principle. We as individuals and as a society eventually reap what we’ve sown.

We need more strong willed fiduciaries to help us navigate the world of investments and retirement. It is your job to find a fiduciary who has your best financial interests at heart. A strong fiduciary will likely help you reach your retirement goals faster.

Reward excellent investment advisors and strong fiduciary models with your investment business. Don’t settle for mediocrity especially when it comes to managing your money and planning for your retirement. Find fiduciaries who have the backbone and track record to do what is right for clients regardless of market conditions.

When seeking a fiduciary, you should look for transparency and a robust investment education system for both new and experienced investors. The investment models utilized should be evidence-based with performance history that is clear and unambiguous.