ARBOR OUTLOOK: Fiduciary pledge and concierge financial services

“Trust in me in all you do … Have the faith I have in you.” — from “Trust in Me,” as performed by Etta James

First in a Three-Part Series

More people are utilizing the services of investment advisors and financial planners than at any time in our history. If you're seeking a relationship with an investment advisor, or even if you already have one, here's a short list of appropriate discussion topics.

One single question winnows the field and helps define your relationship: "Do you serve as a fiduciary 100% of the time?" You've worked diligently to build your nest egg. You want someone sitting on the same side of the table as you, in all aspects of your financial affairs. Ask the potential advisor if they will sign a fiduciary pledge.

It can read: “I pledge to act as a fiduciary and in the best interests of my client at all times. I will always disclose any conflicts of interest that could impact the impartiality of my advice, and I will always disclose any and all fees received as a result of my services.”

It’s a simple process. Copy the above language, fill in your name and the advisor’s name, date it, and ask him to sign it. If he does, it’s a springboard to exploring a potential relationship. If they're not willing, perhaps it’s in your best interest to continue your search. If something happens to you and your spouse or partner is not as financially savvy as you, do you really want someone managing your spouse’s money who is not a legal fiduciary?

"Do you provide (in addition to portfolio management) holistic financial planning, retirement planning, tax services, trust services or provide any estate planning assistance?" is an extremely important question. Most folks who hire an advisor today want much more than portfolio management; they often desire concierge financial services. You may seek advice on real estate transactions and/or the sale of a business. If the advisor says he performs financial planning, ask him to show you a sample financial plan so you can see how much detail is included. If the advisor provides in-house tax services, ask how those services dovetail with their investment strategies. You may want trust services. If you can receive all these services under one roof, it greatly simplifies your life.

You should receive a copy of the firm’s ADV Part 2A Disclosure document, which should include a schedule for fees and other compensation, any regulatory disclosures and information like methods of analysis and investment strategies.

When you fully understand your advisory firm’s services, and trust that they are looking out for you and always acting in your best interest, you can achieve peace of mind regarding your financial affairs. Rarely can you go back and remake your nest egg, so you need to have confidence in your advisor.

Next week we will discuss the onboarding process and what to expect as you actually become a client of an investment advisory firm.

Margaret R. McDowell, ChFC, AIF, author of the syndicated economic column "Arbor Outlook," is the founder of Arbor Wealth Management, LLC, (850-608-6121 — www.arborwealth.net), a “fee-only” registered investment advisory firm located near Sandestin.