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Are you a Fiduciary?

Are you a Fiduciary?

May 03, 2022
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One of the common questions we receive from new prospective clients is, “Are you a fiduciary?” The reason is that many financial pundits recommend potential clients ask this question. We really love to explain because we know it is important to our customers and a way for us to better communicate who we are.

First of all, what is a fiduciary? A fiduciary quite simply is a financial professional who puts the needs of their customers before their own. Of course, we are a for profit business but our philosophy is do what is right for the client in the short term and long term and create win-win relationships. One of my favorite quotes was the motivational speaker, Zig Ziglar. He said, “If you help enough people in life get what they want, you will get what you want.” By serving and giving, it comes back to one tenfold. I know that has been true in my life.

There are 3 ways at Harford Financial Group, we serve as a fiduciary. First of all, in the past several years, the Securities and Exchange Commission (SEC) came up with the Best Interest Standard. From a regulatory standpoint, financial professionals have to operate under a fiduciary standard. If they are not, they must disclose this. Typically, a big contrast point is whether the financial professional uses a level fee approach or commission approach. We believe that the majority of the time the level fee approach is in the best interest of our client. There are certain times that commission approach is in the best interest of the client based on the specific and unique things that the client is trying to achieve.

Second way in which Harford Financial Group acts as fiduciaries is through being Certified Financial Planners. Right now, myself and Melissa Mullan are Certified Financial Planners or CFPs. We are working to make sure that all new financial professionals either have the designation or are working toward it. The CFP has a fiduciary standard very much like doctors have the standard of the Hippocratic oath. CFP’s are committed to serving as fiduciaries by providing financial planning advice through holistic financial planning. CFP’s have to have a standard of knowledge on retirement income, investments, insurance, health care, estate planning, and taxes. Being a CFP says one will follow the holistic financial planning methodology to help client’s achieve their goals. A big part of the CFP guidance supports the SEC regulations by utilizing disclosures and making sure things are adequately explained.

Finally, the most important part of being a Fiduciary is doing what is best for our clients. The first two are more regulatory and compliance in nature. Of course, it is important to do things in the right way from a regulatory standpoint. However, we believe there is something deeper. Our business has been around for over 40 years. Our founder, Matt Rehak believed that we are part of our community and our clients are our neighbors, friends, and fellow citizens. Matt said we never want to be out in public and have to hide because we are ashamed of how we treated someone. We always want to be proud of the work we do for people because they are someone’s mom, sister, daughter, niece, dad, son, grandson, or nephew. Quite honestly, one can meet the regulatory and certification requirements of fiduciary but not have the bigger picture and do things that are just not right for that client. Additionally, our business is largely built on referrals and satisfied customers telling their family and friends about us. It is just easier to act as fiduciary and do the right thing. I guess what I am trying to say is for us being a fiduciary is an intrinsic thing. Our values are Teamwork with HEART. HEART stands for Hospitality, Expertise, Adaptability, Relationships, and Trust. We would probably say the last two, Relationships and Trust are the most important.

We hope this helps better understand how we at Harford Financial Group serve as fiduciaries for our clients.