Meridian Blog

These past few weeks have been a whirlwind and I know that the remaining weeks of 2024 will be as well. Before Thanksgiving, I had the opportunity to join two of my colleagues at the annual Charles Schwab IMPACT conference in San Francisco where some of the brightest minds in the industry came together to provide their insight on what may happen in the markets in 2025 (spoiler alert, no one knows!), investment ideas and opportunities advisors should be tuned into, and general practice knowledge so we as advisors can continue to do what is best for our clients. While the trip was highlighted by some wonderful San Franciscan food (not a lick of Rice-A-Roni to be found) and a trip to Napa after the conference, the ultimate highlight was the chance to meet one of my greatest inspirations, Liz Ann Sonders, the Chief Investment Officer for Charles Schwab.

Not only is she incredibly intelligent, but she reminded us that all her observations are focused on pure data, not on opinions, so you always know what you are getting – as much as of an unbiased opinion as possible.

Recently I’ve had a lot of thought around this idea of “know what you’re getting” when it comes to “experts”, advisors, and those who provide advice for a living. Sadly, I’ve heard stories from many individuals of their experience with advisors who touted themselves as working in their clients’ best interests, but in fact were not.

Back in July, Sarah Yakel wrote a blog about one of Meridian’s key pillars of being independent. Another fundamental pillar to who we are is the fact that we are fiduciaries.

Not all financial advisors are created equal, especially when it comes to their responsibilities to you, the client.

A fiduciary is a financial advisor who is legally obligated to act in your best interest, even if it means putting your needs ahead of their own. This key distinction sets fiduciaries apart from other advisors who may only have to meet a lower standard of “suitability” – meaning they only need to recommend products or strategies that are suitable for you, rather than the best option available.

Fiduciaries Are Legally Bound to Act in Your Best Interest

The most significant advantage of working with a fiduciary is that they are required by law to put your interests first. This is in stark contrast to other advisors who may have a conflict of interest due to commissions or incentives tied to specific financial products. Fiduciaries must disclose any potential conflicts of interest, ensuring that their recommendations are based solely on what is best for you and not influenced by personal gain.

Transparency in Fees and Compensation

A fiduciary is required to provide full transparency regarding their fees and compensation structure in a way that you can understand. This means you’ll know exactly how they are paid and what, if any, additional costs you might incur. In many cases, fiduciaries work on a fee-only basis much like Meridian does, meaning they are only paid by their clients, not from commissions or kickbacks from third parties. This creates an alignment of interests – their success is tied directly to your financial success, which helps eliminate potential conflicts of interest.
Working with a fiduciary can also help you avoid hidden fees or charges that might eat away at your investment returns. By having a clear understanding of the costs involved, you can make more informed decisions about the services you’re receiving.

Objective Financial Guidance

Because fiduciaries are obligated to act in your best interest, their advice tends to be more objective and unbiased. They have a duty to recommend strategies, investments, and products that best serve your goals, not products that simply generate a commission for them. Whether you’re seeking investment advice, tax planning, retirement strategies, or estate planning, a fiduciary will always provide recommendations that are free from outside influence and focused on achieving your specific financial objectives.

Moreover, fiduciaries will also provide advice based on the most up-to-date information available, ensuring that you are always making decisions based on the best possible data. Again — data focused much like Liz Ann.

Knowing that your financial advisor has a legal and ethical responsibility to act in your best interest provides peace of mind. You can feel confident that your advisor is not just offering financial products that benefit them but is genuinely working to help you reach your financial goals.

This peace of mind extends beyond individual investments. A fiduciary is someone you can trust to manage your entire financial picture, providing advice on everything from retirement savings to tax strategies, ensuring that your long-term objectives are always front and center.

Our job is to understand your personal financial situation, goals, and risk tolerance, and to guide you through the complexities of managing your finances long term. In order to foster this deeper level of trust, we strive to be proactive in educating our clients, ensuring you understand the reasons behind every recommendation.

When it comes to financial planning and investment management, your goals, security, and peace of mind should always come first. By working with a fiduciary, you are ensuring that your financial advisor is legally and ethically bound to act in your best interest.
As you make decisions about your financial future, remember that not all financial advisors are held to the same standard. By choosing to work with a fiduciary, you know what you are getting.

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