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An Odd Word With A Big Advantage: Defining A "Fiduciary"

IN THE PRESS:

Oct. 1, 2021

Merriam-Webster defines fiduciary this way: “one that holds a fiduciary relation or acts in a fiduciary capacity.” Not all that helpful... 

For a word that’s been around since 1631, it sure has done a good job of escaping understanding. 

But by consulting another dictionary, one might finally understand what all the hype is about. Dictionary.com defines fiduciary this way: “a person to whom property or power is entrusted for the benefit of another.” That’s better.

 

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Investing involves risk and no situation is the same. This is in no way intended as a personal recommendation and investment decisions are solely those of the reader.

Some financial advisors are fiduciaries, obligated by law to act in your best interest as they manage your assets or money. Rather than operating out of self-interest (such as recommending insurance policies or investments in pursuit of fees and commissions), a fiduciary advisor is obligated to make recommendations that benefit you, the customer. 

The benefits of a fiduciary are clear: Americans who enlist fiduciary advisors report increased investment gains and benefit from increased assurance regarding financial decisions. A 2019 Northwestern Mutual study found that U.S. adults who work with a financial advisor report “substantially greater financial security, confidence, and clarity than those who go it alone.”1

Yet knowing how to find a reputable fiduciary advisor is, for many, the most confusing task of all. Common Google searches related to the topic reveal a desperate search for direction. “Fiduciary financial advisors near me,” “best fiduciary financial advisor,” and “financial investment advisors near me” are searched for hundreds of times per day.

Finding a fiduciary shouldn’t be that hard. Thankfully, it isn’t.

Our free matching tool helps Americans get matched with three local advisors so that they can compare and decide which advisor is right for them. 

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SmartAsset is a personal finance technology company that features a financial advisor matching service. Financial Advisors who appear on SmartAsset are from companies with which SmartAsset receives compensation. SmartAsset takes into consideration wealth and location to determine how to match users with advisors. SmartAsset doesn't include the entire universe of Financial Advisors.

Sources:
1. Northwestern Mutual study.

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