Fiduciary Standards: What 401K Sponsors and Affluent Investors Need to Know

Our friends over at Fi360 (www.fi360.com), wrote a column this week summing up perfectly what managers or stewards of wealth should be focusing when considering hiring an advisor.

Here are five principles that fiduciaries can adhere to:

1. Place investors best interests first

2. Provide advice with the skill, care, diligence and the judgment of a professional

3. Provide fair and full disclosure of all material facts

4. Avoid conflicts of interest

5. Manage unavoidable conflicts in the best interest of the client.

Lastly, Investment News came out today with the results of the Spectrum Group's annual survey regarding who affluent investors are hiring to manage their financial assets. The results showed that nearly 22% of the affluent fired their commissioned-based broker and hired an independent advisor in 2008. Moreover, congress is considering passing laws that will disallow brokers from giving investment advice to individuals altogether.

by David A. Mascio