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July 09, 2026 |
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Why Work with a Fiduciary
The fiduciary model of financial advice is changing the way advisory services are offered. In a traditional commission-based compensation system, the advisor receives payment from a third-party provider of financial products, such as an insurance company or a mutual fund company. Many annuities are also sold based on commissions. Under the fiduciary approach, the advisor is paid directly by his or her client. The advisor's fee is typically a percentage of investments being managed for the client, and a portion of the fee can often be paid using pre-tax money. Basing compensation on fees promotes objectivity in the client-advisor relationship. Because the advisor is paid by the client, and not by a third party vendor, he or she can remain objective in recommending investments and other financial solutions. The fiduciary approach forms a central tenet of MFN's business philosophy. |
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