True Fiduciary Necessary

Why Is The True Fiduciary® Standard Necessary?

Throughout the course of your life, you will deal with a vast array of professional experts, almost all of whom you’ll expect to adhere to a certain basic ethical standard, one that allows arm’s length dealings and no hidden motives.

  • We expect our doctors to faithfully follow the Hippocratic Oath.
  • We expect our attorneys to advocate vigorously for our best interests.
  • We expect our coaches to pull out all of the stops (within the bounds of the rules) to win.

But what would you do if you found out that your doctor accepted kickbacks from a pharmaceutical company to prescribe drugs with harsh side effects or limited efficacy when a better solution might be available? What would you think if you found out that your attorney had hired his friend as an expert witness in your case rather than the person generally presumed to be the true expert in the field? And what would you believe if you found out that your team’s coach bet on games in which he participated, whether it was for your team or against it?

You would rightfully be horrified. And you would be smart to find a new person to lead you.

But many Americans – even well-educated, high-earning, otherwise successful members of the professional class – don’t hold their wealth managers to the same basic standards. We assume that they’re the experts and that the existing model for fees, purchases and advice is there for a reason, with the best interest of the client at heart. That assumption runs contrary to everything that we know to be right. If your financial advisor can’t explain how he’s made your life easier in simple layman’s language, without conflicts of interest, how can you be sure that he’s acting across the board in your best interest? While the appearance of impropriety doesn’t necessarily mean that anything improper is being done, where there is smoke there is often fire. By removing potential for doubt or concern, you will simplify your life and stand to reap the rewards that you’ve worked diligently for all of your life.

We’ve all heard the horror stories about people who’ve lost everything due to faulty financial planning, and anyone can sympathize with those folks who’ve suffered that fate. But lost in that dialogue is the tale of the many ways that hard-working Americans are “nickeled and dimed” by their financial advisors. Hidden fees, undisclosed commissions, and obligations to outside firms that seem small on the front end eventually take a huge chunk out of your portfolio on the back end. They may have substantial impacts upon major life decisions, like when and where you retire, and how you are able to take care of your children and grandchildren.

While the details of each investment mechanism and life-planning strategy may not be abundantly clear to you, your advisor should be able to explain in simple terms what they aim to achieve. Just as importantly, he or she should be transparent on the costs passed through to you, the structural mechanisms employed to protect your assets, and the ways in which he or she takes a holistic approach to your life that simplifies your obligations and minimizes or eliminates your worries.

For years some investment advisors have argued that the application of the fiduciary standard would deprive them of the ability to make a living. Some have even asserted that such obligations would be harmful to the client. We’ve been in this business for decades, successfully serving high net worth individuals and families, and the simple fact is that those claims don’t survive any meaningful scrutiny.

We strongly believe that there is no “gray area” in this discussion. These are simple black and white issues, where clear best practices should be obvious and universal.

Watch our Whiteboard Video to learn more about True Fiduciary® and our commitment to positively impacting one million lives through True Fiduciary® Standards.

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What are True Fiduciary® Standards?

  1. Embrace the Legal Fiduciary Obligation to Place Clients’ Interests First.
  2. Deliver Comprehensive Financial Planning.
  3. Provide Fee-Only Advice.
  4. Do Not Accept Commissions.
  5. Receive Only One Source of Revenue: Client Fees.
  6. Provide Transparency on Portfolios and Investments.
  7. Remain Independent from any Bank, Broker Dealer, Insurance, or Custodian.
  8. Measure Client Performance Returns using Independent Third Parties.
  9. Do Not Create Products to Sell or Price Any Public Securities.
  10. Do Not Hold Any Client Assets, Securities, or Money.

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At PagnatoKarp, our focus is on YOU. We go beyond wealth management to simplify and elevate your lifestyle so you have more time to spend on what matters to you most.

We provide Family Office services — personalized and in-house — for investment, planning, tax, legal, private banking, family governance, concierge, and travel. With True Fiduciary® Standards, you receive transparent advice focused on asset protection, cost, and opportunity.

Your time is valuable. Please contact PagnatoKarp at 703-468-2700 to schedule a private, confidential meeting at your convenience.

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