Fiduciary Standards: The Right way to Invest

Recently, the Certified Financial Planner Board of Standards (CFP® Board) issued a new set of rules that command an elevated fiduciary standard—higher than the recently enacted fiduciary rules from the Department of Labor. These rules, for us CFP® practitioners, increase the level of care we must provide to you, our clients. As far as we are concerned, it’s old news.

We already put our clients’ needs ahead of our own through financial planning.

Financial planning is “a collaborative process that helps maximize a client’s potential for meeting life goals through financial advice that integrates relevant elements of the client’s personal and financial circumstances.”

So says the CFP® Board. A lot of hours and time went into crafting this statement. Time and money spent on experts; time and money spent by volunteer CFP practitioners; time and money spent on lawyers and marketing people too. This well-intentioned and hard-wrought phrase speaks to the complexities of a financial decision. It’s never just about the money, ever. Financial planning is always about the “relevant elements of the client’s personal” circumstances.

And the right way to invest starts here: in a personal conversation. What are your stories and values and relationships? What, from that, can we learn about your goals? Seriously. You’re changing. The world is changing. You are writing a new future that may feel similar to countless other clients we have helped in the past, but it’s new to you. Simultaneously stressful and exciting, change always brings about strong emotions that give us a reason to live, to grow, and to love!

Recently, the Certified Financial Planner Board of Standards (CFP® Board) issued a new set of rules that command an elevated fiduciary standard—higher than the recently enacted fiduciary rules from the Department of Labor. These rules, for us CFP® practitioners, increase the level of care we must provide to you, our clients. As far as we are concerned, it’s old news.

We already put our clients’ needs ahead of our own through financial planning.

Financial planning is “a collaborative process that helps maximize a client’s potential for meeting life goals through financial advice that integrates relevant elements of the client’s personal and financial circumstances.”

So says the CFP® Board. A lot of hours and time went into crafting this statement. Time and money spent on experts; time and money spent by volunteer CFP practitioners; time and money spent on lawyers and marketing people too. This well-intentioned and hard-wrought phrase speaks to the complexities of a financial decision. It’s never just about the money, ever. Financial planning is always about the “relevant elements of the client’s personal” circumstances.

And the right way to invest starts here: in a personal conversation. What are your stories and values and relationships? What, from that, can we learn about your goals? Seriously. You’re changing. The world is changing. You are writing a new future that may feel similar to countless other clients we have helped in the past, but it’s new to you. Simultaneously stressful and exciting, change always brings about strong emotions that give us a reason to live, to grow, and to love!

The money ought to be the least of your concerns. Should I invest in this? Should I spend money on that? Can I afford this? Instead, if your financial planner has done a good job, you’re becoming a better person, not necessarily a better investor.

You’re righting the wrongs of your youth, spending more time than your ancestors on interesting activities, meaningful endeavors, surrounded by people who you love. The right way to invest starts with a financial plan—as ever-changing as the plan is—the investments pay homage to the plan. Investments, and their short-term unpredictable returns, do not control the financial plan. And when you’re focused where you need to be, on loving people and spending meaningful time, you’ve little left for asset allocation, investment timing and selection.

The good news is, these things are largely irrelevant in your long-term success. The largest determinant of your wealth will be your financial plan, led by a trustworthy financial planner. By far the most important antecedent to wealth is your ability to build a plan in alignment with who you are, who you will be, and a planner who enables you to stay the course with dignity and independence.

Our time-tested process of personal discovery helps you, a little better than without us, realize yourself. Our academically-rigorous investment philosophy makes good decisions that, over time, prove their value. But the biggest difference is you; your choice. Your conversations with your financial planning coach, helping you along the way, reminding you of the rock-solid decision-making that got you here, and will get you there—where you want to be—that’s the real fiduciary standard.

We are happy the CFP® Board demands a higher standard than does the Federal government from financial planners. We are happy the government is now demanding a fiduciary standard from retail financial planners. But we’ve got a lot more work to do and you, and your friends, have long lives ahead of you full of great stories yet to be written. Let’s go!

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