Client welfare is ‘fiduciary’ campaign focus

Whether they know it or not, consumers have a choice when seeking financial advice:

  • They can work with a fiduciary advisor, whose duty is solely to the client and who works with undivided loyalty to that client; or
  • They can work with a stock broker or insurance agent, whose primary duty is to the firm that employs him or her and who must make only “suitable” recommendations.

To help educate the public about this important issue, Mentor Capital Management Inc. has joined a national campaign to help make consumers aware of the distinction between fiduciaries and non-fiduciaries.

“The fact that we are fiduciaries sets us apart from others calling themselves ‘financial advisers,’ said John S. Davis, CFP, Mentor Capital president. “We want to make sure that consumers know we’re different from most others in this business.

“When you add the fiduciary nature of our work to our high level of expertise and our fee-only nature, it’s a compelling message.”

On June 1st, The National Association of Personal Financial Advisors (NAPFA) rolled out its Focus on Fiduciary campaign nationwide. The fee-only industry organization has created a website at to alert the public to the fact that NAPFA-registered advisors like those with Mentor Capital serve their clients in a fiduciary capacity at all times.

Only a small percentage of financial advisors –  those that are registered with the U.S. Securities and Exchange Commission – are held to the higher fiduciary standard of conduct. Most financial professionals are either representatives of “broker-dealers” or insurance agents and are held to a lower standard.  In fact, they are required by federal law to act in the best interests of their employers, rather than their clients.

“In too many cases this means that the client gets short-changed,” said Davis.

As fiduciaries, advisors of Mentor Capital make the following promises:

  • Compensation – We are compensated solely by our clients, and we do not receive any outside inducements for recommending investments or financial products. This is the true definition of being a “Fee-Only advisor.”
  • Loyalty – Our loyalty lies solely with our clients. We will never be swayed by outside forces to recommend investments with higher commissions or payouts.
  • Disclosure – We will always disclose up front how we are being compensated and whether or not any potential conflicts may impede our ability to provide truly independent advice.

The Focus on Fiduciary web site includes information on the differences between fiduciaries and non-fiduciaries, and a brief questionnaire that can be used when interviewing potential financial advisors.