Fiduciary
Highest standard of care in the financial industry.
At Forrest Financial Partners we act as Fee-Only Fiduciaries on all accounts and at all times
This means that we operate with a simple, transparent fee structure, and there are never any additional charges or commissions. We have a legal obligation to put your interests first 100% of the time. We believe this model allows for the transparency and accountability that are critical to building trust with our clients.
It’s important to note that not all investment managers or financial advisors are held to the fiduciary standard. In contrast, the “best interest standard” is a lower standard of care that applies to other financial industry participants like broker-dealers and dually-registered investment advisors. We think it’s helpful to examine the definition and differences between these standards:
Fiduciary Standard
The fiduciary standard is the highest standard of care in the financial industry, and means that the RIA is legally obligated to act in the clients’ best interest at all times. Fiduciaries have a bond of trust with clients and must avoid all conflicts of interest.
This standard applies at all times, for the duration of the client relationship.
Best-Interest Standard
This is a rule that requires broker-dealers to only recommend financial products that are in their customers’ best interests, and to clearly identify any potential conflicts of interest and financial incentives the broker-dealer may have for the sale of those products.
One key difference, though, is that the best-interest standard only applies at the specific time a recommendation is being made to a client. This leaves space for broker-dealers to choose when, or when not, to act under the best-interest standard. Creating even more room for interpretation is the fact that the SEC has not clearly defined what constitutes a “recommendation”.