Our Fiduciary Role

The importance of fiduciary responsibility has come into the spotlight in recent years because of the rise of corporate malfeasance. Investors reeled from the Enron and WorldCom debacles—the two largest cases of corporate fraud in history.

Unethical, illegal, and misleading practices by large brokerage firms, banks, and mutual fund companies have been prevalent. Prominent investment firms have paid multi-million dollar fines to settle charges of unethical trading, sales and other questionable practices.

Recently, CEO's and executives of major corporations—including those of prominent investment firms—have been tried and convicted for various illegal activities that hurt shareholders and investors. Even the highest elected officials at the state and federal levels are regularly in the spotlight for illegal activities.

In a time of financial industry scandals, trust in your investment advisor is more important than ever. Stewards of retirement plans, endowments, foundations and personal trusts must have clear proof of their investment firm’s integrity.

This creates a difficult situation for you, the investor. What should you do? How do you know who to trust? Are you aware every investment advisor is required by federal law to act as a fiduciary? Put another way, is your financial advisor consistently and properly fulfilling their duties as a fiduciary? Are they? Will they? Can they?

We have the clear-cut answer and a way for you to weed out non-fiduciary relationships.

Before going any further, what is the real definition of a fiduciary, and how do you recognize a fiduciary when you see one? Actually, few advisors can define the term, fewer still operate as fiduciaries, and only a select few can prove they operate as professional fiduciaries.

The word “fiduciary”originally comes from the Latin fides, meaning faith, and fiducia, and is used as a noun and an adjective. As a noun, a person as a fiduciary is grounded in English common law from the Middle Ages and the use of trusts for property conveyance. In this case the fiduciary is a person placed in a position of great trust. As an adjective, a “fiduciary” relationship is characterized by good faith, loyalty and trust

Practically speaking today, a “fiduciary relationship” is the highest standard of care imposed at either equity or law. A fiduciary is expected to be extremely loyal to the person to whom they owe the duty. A fiduciary cannot put their personal interests before their duty, and must not profit from their position as a fiduciary, unless the person to whom they owe the fiduciary duty consents.

The Monitor Group has taken the step few investment advisors are willing and able to take. We have successfully completed the prestigious Center for Fiduciary Excellence (“CEFEX”) Certification as an Investment Advisor. CEFEX provides an independent recognition of a fiduciary's conformity to a defined set of Fiduciary Practices. It implies a fiduciary can demonstrate adherence to the industry's best practices, and is positioned to earn the public's trust.

Why did we subject our firm to an independent fiduciary audit?

To assure you our firm is operating to the highest international professional financial fiduciary standards available today—and has the independent audit to prove it.

To learn more about what it means to be a fiduciary and how that benefits your relationship with your financial advisor, click here.