Our Fiduciary Standards

As a member of National Association of Personal Financial Advisors, (NAPFA), we serve our clients in a Fiduciary capacity, which means that we accept the legal standard to put our clients’ interests first. We work for and are paid by our clients only. This is completely different from how most financial advisors work today. More than 90% of financial advisors are paid (fully or partially) by commissions. Such advisors have powerful financial incentives to promote certain products and services.

These other advisors often work for large financial institutions, such as banks, insurance companies or broker-dealers.  Their loyalty is to their employers, not their clients. Legally, these advisors must act in the best interests of their employers, which may or may not be in the best interests of their clients.

A financial advisor acting as a Fiduciary occupies a position of special trust and confidence.  As a Fiduciary, the financial advisor is required to act with undivided loyalty to the client. This includes full disclosure of how the financial advisor is to be compensated and any corresponding conflicts of interest, whether or not the client requests this information.

The Fiduciary standard adopted by NAPFA covers three central components of the advisor-client relationship:

• Compensation - NAPFA members are compensated solely by their clients, and do not receive any outside inducements for recommending investments or   financial products.
• Loyalty – An advisor who is loyal to only his or her clients will not be swayed by outside forces to recommend investments with higher commissions or payouts.
• Disclosure – People must understand how their financial advisor is being compensated and whether or not any potential conflicts may impede an advisor’s ability to provide truly independent advice. The advisor has the duty to disclose any possible conflicts of interest to the client. 

For more information about our fiduciary standards, please visit www.focusonfiduciary.com.