If you are a business owner or investor based in Tampa, Florida, you may want to hire a fiduciary advisor. Fiduciary advisors can play a unique role in your financial planning process so that you can make decisions to increase your wealth in the long run.
Knowing what exactly fiduciary advisors do can help you decide whether hiring one can serve your financial goals for your Tampa-based business.
What is a fiduciary advisor?
A fiduciary advisor is a financial advisor who serves under fiduciary duty. Fiduciary duty legally binds a financial advisor to their clients’ best interests. As a result, they can only make financial recommendations with your financial interests as a priority, not their own. For example, if two similar investment opportunities have become available, your fiduciary advisor will recommend the investment that is most appropriate for your unique financial situation. Doing so would be in your best financial interest. Additionally, a fiduciary advisor must remove, or if it cannot be removed, disclose any conflicts of interest they may have when recommending investment opportunities.
The term “fiduciary” refers to a person or legal entity who is entrusted with another person’s finances. For example, a fiduciary financial advisor who has discretion will buy and sell investments on a client’s behalf without needing their consent before every trade.
Since this kind of position requires an immense amount of trust, a fiduciary advisor is held at a higher standard than regular financial advisors. If they do not uphold their fiduciary duty, they can face severe consequences.
Not all financial advisors serve under fiduciary duty. It is therefore important to pay attention to your financial advisor’s title and credentials to determine if they work under a fiduciary pledge.
How can a fiduciary financial advisor in Tampa benefit your financial planning?
Not all investors need a fiduciary advisor to help them invest. However, you may need a fiduciary advisor if you need hands-on guidance as to where and how much to save for your financial goals. Fiduciary advisors, including Tampa-based ones, can offer the following benefits:
- Frequent surveillance — A fiduciary advisor often keeps up with both global and local financial news and developments, whether in Tampa or elsewhere. At the same time, they will continually monitor their clients’ investments and financial situations. As a result, if your fiduciary advisor has concerns about your finances, notices a decline in your portfolio values, or sees a major investment opportunity, they will invest your money according to what would benefit you the most. At the end of the day, a fiduciary is obligated to adhere to a high standard of ethical conduct when it comes to your money.
- Peace of mind — If a fiduciary advisor fails to act in your best interest, the U.S. Securities and Exchange Commission (SEC) may revoke the advisor’s registration. They may also be forbidden to practice in the industry or be charged a hefty fine. Since a fiduciary’s obligations are legally binding, you can pursue legal action if you believe that your fiduciary advisor breached fiduciary duty ethics. As a result of these heavy consequences, you can be at ease knowing that your fiduciary advisor will act according to fiduciary duty to protect and maintain their reputation.
- Avoid commission costs — Financial advisors who are nonfiduciary entities can charge according to a commission system. This means that they either get paid from the sale of investments, after the sale of a product or after a percentage of each transaction. On the other hand, fiduciary advisors charge either an asset-based, flat or hourly rate. They do not earn commissions or trading fees based on the investments they recommend.
Talk to a ProVise CFP® professional about finding a fiduciary advisor in Tampa
Are you an investor or business owner in Tampa looking for an advisor? At ProVise Management Group, our CERTIFIED FINANCIAL PLANNER™ professionals can get to know you and your current financial circumstances, goals, risk tolerance and personal values to help you develop a plan that works for you. We can also create a written plan for you at a fiduciary standard of care. All our written plans come with an unconditional money-back guarantee. If you are unhappy with your written plan, you can return it to us, and we will refund 100% of the fee paid.
Are you ready to talk to a professional about finding a fiduciary advisor in Tampa? Contact ProVise today to schedule a complimentary consultation.