Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Life Health > Running Your Business

Double your speed to the close

Your article was successfully shared with the contacts you provided.

Last month, you learned that getting to trust fast requires two things: (1) being transparent and (2) acting as a fiduciary. You also learned that purchasing a background check on yourself is a powerful trust-building strategy, because it’s the best way to prove your record is beyond reproach.

However, this only gets you 50 percent of the way to trust. This month, I’d like to discuss how to earn the remaining 50 percent: becoming a fiduciary.

What’s a fiduciary?

It’s someone who places the client’s best interests first. According to the Certified Financial Planner Board of Standards, a fiduciary “acts in utmost good faith, in a manner he or she reasonably believes to be in the best interests of the client.” This also requires:

  • Being loyal to your clients.
  • Offering prudent advice.
  • Avoiding (and disclosing) conflicts of interest.

In recent years, many agents have earned their Series 65 or 66 investment-advisory licenses (RIA). Their goal: mainly to acquire the legal right to review client investments in order to source funds for annuity purchases. But many have failed to realize that a Series 65 or 66 imposes a fiduciary standard of care. Are you fulfilling that standard or just using your investment-advisor license to grease your current business model?

And consider this: True fiduciaries treat their clients as if they were their parents. If you were advising your father and mother about their retirement income strategy, would you just recommend they buy a suitable annuity? No, you’d try to find the best possible solution (annuity or any other financial vehicle) that generates the income they need. Doing less would violate your fiduciary duty.

So I’ll ask you again: Are you a fiduciary in name only, or are you truly operating as one?

Now, If you are not an RIA, that’s OK. But you should consider adopting a fiduciary mindset within the framework of your existing license. In practice, this means you’ll operate under a suitability standard, but try to exceed that standard whenever possible. 

Either way, you must now convince clients you take your fiduciary obligations seriously. These pointers should help you:

  • Disclose your standard of care in writing during the initial prospect meeting.
  • Do comprehensive fact-finding so you know what your client’s best interests are, even if it takes multiple meetings.
  • Disclose how you’re paid so the client knows exactly what you stand to gain.
  • Tie your recommendations to client needs, supporting them with facts. When appropriate, surprise the person by recommending an action that doesn’t immediately benefit you (example: recommending a cash equivalent rather than a commissioned product).
  • Commit yourself to ongoing professional development, ideally by studying for a ChFC, CFP, or other rigorous designation.

If you do all of the above, your clients will likely reward you with their trust, faster than ever before. And you will build a loyal and profitable client base. What else can an advisor ask for?

For more from Steven McCarty, see:


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.