Fiduciary Standard

Put simply, acting in a Fiduciary capacity means that we will always put your best interest first and foremost. This seems like it should be a foregone conclusion when working with a financial advisor, but, sadly, the vast majority of the industry does not adhere to this standard of care.

As a member of NAPFA, Lumia Wealth pledges to:

  • Always act in good faith and with candor
  • Be proactive in disclosing any conflicts of interest that may impact a client
  • Not accept any referral fees or compensation contingent upon the purchase or sale of financial products

The opposite side of the Fiduciary Standard is the Suitability Standard, which is where most financial advisors and brokers operate. This standard does not require them to put your best interest first. This can lead to recommendations that might be suitable for you, but not in your best interest or consistent with your goals and objectives. Often times there are hidden conflicts of interest that are not required to be disclosed by advisors adhering to this standard. These actions can negatively impact you through higher fees and commissions from products being sold to you that you might not need.

An example of this type of incentive structure is the classic incentive vacation. An insurance company will have its representatives push to sell a certain amount of some insurance and the top 10 performers win a vacation to a swanky resort.