The following is the definition from www.dictionary.com:

A person to whom property or power is entrusted for the benefit of another.

Fiduciary is an interesting word in the financial planning arena. Many financial professionals throw the word around loosely and claim to be a fiduciary or have the client’s best interest at heart. I think actions speak louder than words though and a lot can be determined by the way a “fiduciary” manages money for a client.

My definition of a fiduciary is a little different than dictionary.com. A fiduciary is someone hired to protect and grow a client’s money with as little risk as possible. Notice that protect is first, growth is second.

Think of it this way, if you invest your money with a “fiduciary” and they invest in stocks, bonds, index funds, etc that go up when the market is up and go down when the market is down how are they protecting your assets? How are you positioned to minimize downside risk? Are they truly fulfilling their fiduciary obligation?

Fiduciaries often do more than just manage your investments, but I think most would agree it’s a critical component of what a client entrusts a fiduciary to do. So ask yourself how are your investments positioned to deal with the next market downturn or worse the next recession?

If you’re not sure and that concerns you give us a call so we can chat about it.