The Clarity All Investors Deserve
Investors deserve simple descriptions of financial products, investing strategies and investment firm business models. Period.
At a time when we have more access to information than ever before, the financial services industry remains unnecessarily opaque.
Fiduciary Wealth Partners believes the following questions should be openly discussed between investment professionals and their clients:
- What is the cost-of-goods-sold of an investment strategy; what are all the fees, expenses, and product mark-ups?
- How does the investment advisor, broker or trust relationship officer get paid? Are they paid commissions on products you buy? Do they receive financial incentives to offer certain solutions over others?
- Does the investment firm’s business model rely on proprietary products to drive acceptable profit margins? If it does, how do its advisors remain objective in the face of this obvious conflict?
Conflicts abound in firms whose profits are substantially derived from the sale of either proprietary products or third party solutions in a fee wrapper, which may be as profitable or more profitable than proprietary solutions.
Not all firms have these conflicts, and some conflicts can be appropriately managed. Unfortunately, however, investors are at a disadvantage when facing off against firms if they don’t know the inside baseball terminology that makes even detailed disclosures difficult to understand.
The reality is that all advisory firms have conflicts of interest, including Fiduciary Wealth Partners. Conflicts are an inevitable part of any business. We have made Fiduciary Pledges that we believe better align our services with the interests of our clients and encourage all to review them and ask us hard questions. At the end of the day, we feel that managing conflicts comes down to one word: transparency.
Simple, plain-language disclosure that actually describes how products are priced, how professionals are paid and how the firm makes its money – this is something everyone can do.
Fiduciary Wealth Partners wants to help change the conversation from opacity and unanswered questions to transparent dialogue about the way products and strategies can further investors’ goals.
Families and trustees hire us to manage wealth plans, but they often tell us what they value most is the transparency and peace of mind they get when working with us.