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Why Physicians should work with a fiduciary

The higher level of accountability and transparency that a fiduciary is obligated to provide is particularly beneficial for physicians when choosing a financial advisor. The unique financial trajectory physicians often have leads to unique financial planning needs. Those needs may require complex planning and investment strategies. 

By working with a fiduciary, physicians can feel confident that their advisor is providing unbiased advice that is tailored to their specific needs and goals. A fiduciary's obligation to act in their client's best interest also means that they are more likely to provide thoughtful investment advice, rather than encouraging their clients to take on unnecessary risks. 

Additionally, the transparency requirements that fiduciaries must follow ensure that physicians are fully informed about the fees and compensation associated with their advisor's services.

Common Misconceptions about Fiduciaries

‍"Fiduciaries are more expensive than non-fiduciaries"

Fiduciary financial advisors may or may not be more expensive than commission-based brokers, as the cost of financial advice can depend on several factors.

Fiduciary financial advisors typically charge fees based on a percentage of assets under management, an hourly rate, or a flat fee for financial planning services. In general, fiduciary advisors may charge higher fees for their services because they are providing personalized advice tailored to their clients' needs.

Commission-based brokers, on the other hand, earn commissions from selling financial products such as mutual funds, annuities, and insurance policies. These brokers may charge lower fees upfront, but they may not always have their clients' best interests in mind when recommending products. In some cases, commission-based brokers may recommend higher-cost products to earn higher commissions.

Ultimately, the cost of financial advice depends on the individual advisor or broker, their fee structure, the products they recommend, and the complexity of the financial situation. It's important to consider not only the cost but also the quality and type of advice you receive when choosing a financial advisor or broker.

‍"Non-fiduciaries can still act in the client's best interest"

While it's true that non-fiduciaries may have their clients' best interests in mind, they are not legally required to act in their clients' best interest in the same way that fiduciaries are. This standard falls short of the higher legal and ethical standard that fiduciaries are held to. Non-fiduciary advisors are definitely able to act in their client’s best interest, but are not legally obligated to and may be incentivized to recommend certain financial products.

‍"Fiduciaries only work with wealthy clients"

The fiduciary duty to act in the client's best interest applies to all clients, regardless of their income or wealth level. Fiduciaries who work with a diverse range of clients can help individuals at all income levels achieve their financial goals by providing personalized, unbiased advice tailored to their unique needs and situation. 

Working with a fiduciary can be especially beneficial for individuals like physicians, who may be more vulnerable to the potential financial risks and challenges associated with managing their money. Ultimately, the decision to work with a fiduciary should be based on the individual's specific financial planning needs and goals, rather than their income or wealth level.

Working with a fiduciary financial advisor can provide numerous benefits for physicians seeking to manage their wealth effectively. A fiduciary's legal and ethical obligations to act in their client's best interest and provide transparency and accountability ensure that physicians receive unbiased advice that is tailored to their unique financial situation and goals. Fiduciaries can provide conflict-free advice, offer specialized expertise, and ensure ongoing monitoring and adjustments to financial plans. Contrary to common misconceptions, fiduciaries are not necessarily more expensive than non-fiduciary advisors, and many are willing and able to work with clients at all income levels. 

Ultimately, physicians should carefully evaluate their financial planning needs and goals, as well as the qualifications and experience of potential advisors, before making a decision on who to work with. By partnering with a fiduciary financial advisor, physicians can gain peace of mind and confidence in their financial planning, helping them achieve long-term financial success. At Forme Financial, we’re proud to be a fiduciary, where our focus is on the best interests of our physician clients.