What is a Fiduciary?
Nearly half of Americans believe their financial advisers are legally required to always act in their clients' best interests. Not only is this inaccurate, but it can also be detrimental to investors who expose themselves to biased and potentially costly advice from advisers who put their own interests before investors. According to the Cornell Law Dictionary, "A fiduciary duty is the highest standard of care." It entails always acting in your beneficiary's best interest, even if doing so is contrary to yours. For a financial adviser, this may mean recommending a product that results in reduced or no compensation because it's the best option for the client.
An adviser who isn’t a fiduciary can steer you into products that put more money into his or her pocket, as long as they're considered suitable for you. For example, when faced with two comparable investments, one of which has a higher commission, a fiduciary couldn't recommend the pricier investment because paying more in fees isn't in the client's best interest. An adviser held to the suitability standard, however, could recommend the more expensive product provided it's "suitable" for the client.
The National Association of Personal Financial Advisors (NAPFA) defines a “Fee-Only” financial adviser as one who is compensated solely by the client with neither the adviser nor any related party receiving compensation that is contingent on the purchase or sale of a financial product. Neither members nor affiliates may receive commissions, rebates, awards, finder’s fees, bonuses or other forms of compensation from others as a result of a client’s implementation of the individual’s planning recommendations. "Fee-offset" arrangements, 12b-1 fees, insurance rebates or renewals and wrap fee arrangements that are transaction based are examples of compensation arrangements that do not meet the NAPFA definition of Fee-Only practice.
The majority of financial advisers are sellers of financial products. Some or all of their income may be dependent upon their ability to steer clients to a limited number of the thousands of financial products available today. These advisers include stockbrokers, now euphemistically called "financial consultants," insurance agents, accountants, attorneys and most financial planners. Many clients are not aware of their advisers' dependence on selling products, or do not recognize its significance.
What does Fidelium Charge?
As a Fiduciary, Fidelium Investment Advisers does not sell financial products or earn commissions from products it recommends. Fidelium is a ‘fee-only advisor.’ The fee is specific to each client and is based on a percentage of Assets Under Management (AUM), fee for service, or flat fee depending on the client’s personal situation. Our fees are often lower than the industry average. Length of service discounts are available.
Who are my typical clients?
Fidelium serves a wide range of clients from small business owners, retired teachers and Fortune 500 executives.
Does Fidelium have any account minimums?
The minimum required to open a Fidelium Investment Advisory account is a $225,000 combined balance. Exceptions may be made when small balances are part of a family household.
