This Video Explains Why Your Financial Planner Needs to Be a Fiduciary
You may have heard the Fiduciary Rule in the headlines lately. The Obama administration planned to implement it this year, but the Trump administration recently shelved it . So what is a fiduciary and why should you care? This video breaks down this.
Simply put, a confidant is someone who controls your money and swears to give only advice that works in your best interest. For example, Certified Financial Planners (CFPs) take the Fiduciary Oath. The problem is that not all financial advisors are fiduciaries. The new rule would force anyone involved in your retirement investments to adhere to the same standards that fiduciaries use.
Like CFPs, brokers process your investments and savings, but there is a very important difference between them, and this video is great for helping to spot the difference when comparing butchers to nutritionists. Briefly speaking:
“Butchers are food brokers, proxies are nutritionists who care about your health.”
Butchers may sell the best meat available, and it may be great meat, but that doesn’t necessarily mean it will be good for you in the long run. Nutritionists are more interested in your overall health than just what foods they have on hand (because they don’t sell foods). Watch the video for yourself above and you can learn more about fiduciaries at the New York Times link below.
Brokers vs. Fiduciaries | HighTower Advisors via The New York Times