Wealth Management Blog | WrapManager

3 Reasons You Need A Fiduciary

February 28, 2017

In the realm of investment advice, all it takes is seeing the definition of “fiduciary standard” to understand why it’s so important:

Fiduciary - “a Financial Advisor held to a ‘Fiduciary Standard’ occupies a position of special trust and confidence when working with a client. As a Fiduciary, the financial advisor is required to act with undivided loyalty to the client. This includes disclosure of how a financial advisor is to be compensated and any corresponding conflicts of interest."

Put simply, abiding by the Fiduciary Standard means putting your clients’ interests first. Most investors might read the above definition and think, wasn’t this the rule the entire time? It should be that simple, right? Not necessarily.

The Definition of Fiduciary Matters: Here’s Why

May 25, 2016

On Wednesday, April 6, the U.S. Department of Labor finalized what they’re calling the “rule to address conflicts of interest in retirement advice.” Many advisors have been concerned about what the rules would actually entail, and how it might affect their business models. According to a survey of 485 financial advisors conducted by Fidelity, 73% are concerned the rule will have a negative impact on the way they do business. In short, the rule states that any advisor/broker that handles retirement accounts must adhere to the fiduciary standard (to note: WrapManager already adheres to the fiduciary standard, so we do not anticipate any significant changes to how we operate). That means that no matter what the product involved—stocks, annuities, mutual funds, separately managed accounts, or commission products—the advisor must by law put the client’s best interests ahead of their own. Before the law, certain brokers and types of advisors could recommend a product as long as it was “suitable” for their clients. [+] Read More

What's the difference between the Fiduciary Standard and the Suitability Standard?

February 3, 2016

Here’s a fact about financial advisors (NOT Investment Advisors) that may surprise you: they do not necessarily have to act with your best interests in mind. Please, take a moment to shake your head in disbelief. It’s ok. Actually, it’s not ok! The way the law exists today, advisors and brokers can be classified in one of two ways. Either they give you investment advice according to the fiduciary standard, or they adhere to what's known as the suitability standard. It’s the latter one that can be problematic, and it’s also the growing subject of legal debate as the White House and Department of Labor consider new rules. Below, we broke down what you need to know now and what to look for ahead. [+] Read More

Doctors Have the Hippocratic Oath - What About Financial Advisors?

August 7, 2014

The Hippocratic oath for doctors dates back 2,500 years, and it is credited to Hippocrates, the father of modern medicine. As far back as the oath reaches, it’s core meaning still remains today – a doctor must put the interests of every patient before their own.1 We think the same principle should apply to financial advisors. Someone who gives you investment advice should act in your best interests and place your interests ahead of their own. Importantly, that also means not making recommendations simply because they produce higher commissions for the advisor or their investment firm. Do Financial Advisors Have to Put Your Interests Before Their Own? Not necessarily. [+] Read More