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Is a "no charge" Written Second Opinion ever Fiduciary? Or is it just boilerplate or a template?

| April 19, 2017

A "complimentary" Written Second Opinion might just be worth only what you paid for it

If you have enough interest in financial and / or investment topics to be reading this blog, you have probably been given a "complimentary," no-obligation Written Second Opinion at some time in your investment life.

Inside the investment industry, those of us with various licenses and credentials are provided a very large and potentially confusing array of software choices.  While some software can be very expensive, other software is "included" for the licensed professional after going through a typical registration process on the provider's web site.

The advantages of various software to the "Financial Folks" using the software as a sales tool can be significant.  Professional looking.  Perhaps clarifying and understandable to the prospective client.

But is it Fiduciary? (In the clients' best interests?) Maybe.  Maybe not.  It depends.

To Be Effective, Your Fiduciary Must Have All the Data and Documents ... 

Financial "Folks" who say they adhere to the Fiduciary Standard must understand the potential clients' complete situation ("Data and Documents.") Gaining this understanding is easier said than done ... on both sides of the desk.  Existing clients of financial advisers have in the past been known to "push back" when asked for Tax Returns ... Legal Documents ... Insurances ... Statements from other Investment Providers.

Yet, if you stop and think about it, how can any Financial Professional ... no matter how skilled and experienced ... make recommendations in your best interests without knowing this information.

And if all that information is readily forthcoming, analyzing it all is neither simple nor quick ... it's time-consuming.

Can Boilerplate or a Template Be Fiduciary?

So, I conclude that the "complimentary" Written Second Opinion referenced in the title above might possibly be boilerplate or a template.  Not automatically ... but possibly ... maybe even likely.  "Boilerplate," perhaps known as One Size Fits All, would be very difficult to make Fiduciary.  

If a template is applied to a 25 year old just starting out, it could be fiduciary.  As a CFP(r) Professional, I would still want to know more ... Married, Divorced, Single? Children? Potential Inheritance? Debts? Disability Income coverage --- Group or Individual.  I have not personally seen templates taking account of all these things.  More likely the template would include ... Income --- balance in a 401(k) --- annual contribution into a 401(k) -- other investments.

Might "robo-advisers" ... on-line brokerages .... low-expense, no-load providers be Fiduciary?

I recently had a very positive experience with a PA (Physician's Assistant) at an Urgent Care spot. Perhaps more than in other countries (I'm not completely sure ...) in the U.S. we have many medical choices and they seem to be expanding. In addition to free-standing Urgent Care spots, it is also possible to see a live person at many large drug chains.  Actually done it at CVS for one.  PA's - Nurse Practitioners - Midwives - RNs -- DPT (Physical Therapist) -- Chiropractors - all of these medical "folks" work in our medical system and, I believe, provide value.

But ... none of the above are actually MDs.

In a similar but not identical fashion, robo-advisers, on-line brokerages and low-expense, no-load providers are in the financial services business in the U.S. Are they fiduciaries?  If you choose to do any kind of financial business with any of the above kinds of providers, just ask your provider if s/he is following the Fiduciary Standard?  If they tell you "yes," ... and they have collected all the data and documents ... then I might believe their "yes" answer.

If you need medical services and go see a ... PA - Nurse Practitioner - Midwife - RN -- Chiropractors .. any of these people acting ethically will tell you as soon as they can determine it if they can actually help you or if you require the services of a different medical professional, especially an MD.

That would be my acid test of the financial providers.  If they are looking at everything ... and if they know their own limitations and will readily refer you to someone "up the food chain" with greater expertise and / or professional experience and credentials, then in my mind they are acting in your best interests. :-)  Find one of those!

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