We are a fiduciary. Being a fiduciary means that we act honestly, act in good faith, act with fair dealing, and act with undivided loyalty to our clients. Being a fiduciary compels us to act in the clients’ best interests – your best interests – first, foremost, and always. This is an area where we will never compromise. It is not just a promise. It is the right thing to do. It is not just the moral and ethical thing to do (which it most certainly is). It is a legal obligation. We are duty bound to always do our utmost to fulfill our fiduciary duties.
It sounds simple and straightforward. You may (like many other people) mistakenly believe that all advisors are fiduciaries and that all advisors always put their clients’ interests first. Bizarrely and very sadly, you would be very wrong. Some “advisors” follow a lesser rule (in our opinion) of suitability.
With suitability, an advisor makes recommendations based on investments that are suitable for a clients’ personal situation; but (very importantly) the suitability standard does not require the advice to be in the clients’ best interests. You could wind up with an investment that is suitable for your needs even if a better and/or lower cost investment is available.
An example of the difference between fiduciary and suitable is that a broker could recommend a mutual fund if it met the requirements of a client (that is, it is suitable). However, the broker could recommend a high cost, high commission share class of the fund even if a lower cost, no commission share class of the exact same fund (with the exact same stocks and the exact same manager) was available. A fiduciary would recommend the low-cost, no commission share class because that is what is in the clients’ best interests. As you can clearly see, we believe that suitable (not acting in the clients’ best interest at all times) is very wrong and is very clearly different from fiduciary. We do not believe that suitable is sufficient. We strongly believe that clients deserve more. We are fiduciaries. We act in a clients’ best interests – at all times and in all circumstances. It is how we would want to be treated if the roles were reversed.
We feel so strongly about our fiduciary commitment and duty that we put it in our firm’s name –
Leder Fiduciary Capital.