Fiduciary Duty

A fiduciary obligation is a duty to act in the best interest of our clients.

As an Investment Advisor Representative of Cambridge Investment Research Advisors there is a fiduciary obligation to our clients.   This ensures our clients that we have a legal obligation to act in their best interest.  We are legally bound to disclose any conflicts of interest. We do not have legal custody of our client’s assets, we use outside third party custodians for all of our clients assets.

This is important because registered investment adviser firms and their representatives are fiduciaries as set forth in the Investment Advisers Act of 1940. A fiduciary is an individual or entity that is legally obligated to always act in clients’ best interests.

Full disclosure of any conflicts of interest is also required in order to meet the fiduciary standard of client care.

Throughout the financial services industry there are many responsibilities for which an advisor may be held accountable. Insurance agents or registered representatives that are not Registered Investment Advisors or Investment Advisor Representatives are only obligated to ensure that recommended investments are suitable. Representatives that are not a Registered Investment Advisor or an Investment Advisor Representative do not have legal responsibilities to look out for your best interests. They are merely required to ensure proper disclosure.

Knowing that your advisor is on your team gives you one less thing to worry about.

Fiduciary advisors make up less than 15% of the financial industry.

Tips for assessing fiduciary standards:

• Look for either an independent Registered Investment Advisor (RIA) or an independent Investment Advisor Representative (IAR).
• Both independent Registered Investment Advisors and Investment Advisor Representatives do not answer to anyone other than the client.
• Ask about possible conflicts of interest.
• Ask how the advisor is compensated.
  

“Our Philosophy is Clear: to do what is right for our clients, each and every day.”

Why an Independent Financial Advisor?

Secure Funds

In light of current white collar scandals and scams, many people are nervous about investing their money with a small independent private firm. Although most financial advisors are honest, it is always best to ensure your funds are protected.

At Lighthouse Financial Strategies, our client’s funds are always held in custody at unbiased third party management firms such as Pershing, TD Ameritrade, SEI or AssetMark – this allows our clients to have direct access to their money and enjoy the benefits of being insured and protected by a very large organization. Third party custodians also deliver your quarterly statements to you directly, not thru the advisor, this further assures security of your funds.

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What Is A Trusted Advisor?

A Trusted Advisor in our world is a financial professional who fulfills the Five C’s of trust.

CHARACTER – You must be able to trust their character to do the right thing.

COMPETENCY – You must be able to trust that they are competent to know what is best for you.

CONSISTENCY – You must be able to know that you can count on them… every time.

CARE – You must be able to trust that they genuinely care about the financial outcomes for you and your family.

COMPASSION –  You must know that they are people who have sincere compassion for the people who place their trust in them.

This is a Trusted Advisor.

These Seven Principles have been created by the CFP Board of Standards and adopted by Lighthouse Financial Strategies Ltd. These ethics express our recognition of our responsibilities to the public, to clients, and to colleagues, and provide guidance in the performance of our professional services.

Principle 1 – INTEGRITY

Integrity demands honesty and candor which must not be subordinated to personal gain and advantage. Certificants are placed in positions of trust by clients, and the ultimate source of that trust is the certificant’s personal integrity. Allowance can be made for innocent error and legitimate differences of opinion, but integrity cannot co-exist with deceit or subordination of one’s principles.

Principle 2 – OBJECTIVITY

Objectivity requires intellectual honesty and impartiality. It is an essential quality for any professional. Regardless of the particular service rendered or the capacity in which we function, we should protect the integrity of our work, maintain objectivity, and avoid subordination of our judgment that would be in violation of this Code of Ethics.

Principle 3 – COMPETENCE

One is competent only when he or she has attained and maintained an adequate level of knowledge and skill, and applies that knowledge effectively in providing services to clients. Competence also includes the wisdom to recognize the limitations of that knowledge and when consultation or client referral is appropriate. In addition to assimilating the common body of knowledge required and acquiring the necessary experience to practice, we shall make a continuing commitment to learning and professional improvement.

Principle 4 – FAIRNESS

Fairness requires impartiality, intellectual honesty and disclosure of conflict(s) of interest. It involves a subordination of one’s own feelings, prejudices and desires so as to achieve a proper balance of conflicting interests. Fairness is treating others in the same fashion that you would want to be treated and is an essential trait of any professional.

Principle 5 – CONFIDENTIALITY

A client, by seeking our services, may be interested in creating a relationship of personal trust and confidence with us. This type of relationship can only be built upon the understanding that information supplied to us will be confidential. In order to provide the contemplated services effectively and to protect the client’s privacy, we shall safeguard the confidentiality of such information.

Principle 6 – PROFESSIONALISM

Because of the importance of the professional services rendered by us, there are attendant responsibilities to behave with dignity and courtesy to all those who use our services, fellow professionals, and those in related professions. We also have an obligation to cooperate with fellow practitioners to enhance and maintain the profession’s public image and to work jointly with others to improve the quality of services. It is only through the combined efforts of us, in cooperation with other professionals, that this vision can be realized.

Principle 7 – DILIGENCE

Diligence is the provision of services in a reasonably prompt and thorough manner. Diligence also includes proper planning for, and supervision of, the rendering of professional services.