Understanding Fiduciary Standards and Evidence-Based Advice
Objective Financial Guidance Starts With the Fiduciary Standard
Choosing a financial advisor can feel overwhelming, especially when terms like fiduciary, fee-based, and fee-only sound similar but come with very different levels of obligation. This video walks through what it means to work with a fiduciary financial advisor who is committed to acting in your best interest at all times. You will learn how fiduciary guidance differs from product-driven sales, why fee-only matters, and how an evidence-based investment philosophy creates clarity and confidence.
At Smith Bruer, our role is to understand who you are as an investor, your long-term goals and needs, and how to support you through the ups and downs of markets, the economy, and life.
What You Will Learn in This Video
1. Why Most Advisors Are Not Fiduciaries
Many professionals in the financial services industry are incentivized to sell products. Their guidance can be influenced by commissions or sales targets. A fiduciary financial advisor is legally and ethically required to prioritize your interests first.
2. The Difference Between Fee-Only and Fee-Based
Fee-based firms can receive commissions, third-party compensation, or incentives. Fee-only advisors do not accept commissions and are paid only by clients. This structure creates transparency and clarity around the advice you receive.
3. How to Confirm if an Advisor Is Truly a Fiduciary
If someone claims to be a fiduciary, ask them to put it in writing. A true fiduciary advisor will have no hesitation.
4. Why Evidence-Based Investing Matters
Our investment philosophy is built on decades of rigorous academic research. It is transparent, defensible, and focused on long-term outcomes rather than speculation.
5. Why Financial Planning Comes First
Planning helps define your path, measure progress, and set expectations. Investment performance alone cannot tell you whether you are on track for the life you want.
Transcript of the Video
The majority of folks in our industry are not fiduciaries.
So it tends to be more product-focused people who are being incentivized to sell products versus going through an objective process to determine who people are as investors, what really is important, and creating a map of how to get there through the inevitable ups and downs in the markets and the economy, and life.
A fiduciary is someone that has to adhere to the highest legal standard. It is defined in law but there is also a spirit behind it. If you are not sure and somebody says they are a fiduciary, ask them if they will put it in writing.
What fee-based does mean is that third parties and intermediaries compensate you via commissions or incentives. A fee-only firm does not have any of that. Does that mean that commissioned products are inherently bad? No, it does not. But you do not know how it is going to be used.
I have yet to run into a fee-only firm that is not very clearly stating that they are fee only. I have seen fee-based situations where the ambiguity itself is actually very clear because there is no definitive statement that we are a fiduciary at all times.
In our industry that word is not used a lot: philosophy. A big part of when we created Smith Bruer is that we created our own culture and created an investment philosophy that is defendable. How is that defendable? Because we have research. We have decades of academic and rigorous research that anybody can find. It is not hidden. We do not focus on any product. We simply focus on the evidence.
Planning is at the forefront. It has to be because that is the only way we get to understand who we are working with. Something we say often is that either you are going to have a planning focus or it is going to be an investment performance focus. But if you have the best performance in the world, more than anybody else, how do you know it is enough?
Finance is similar to a minefield. Success is a very narrow path but the minute you get off it there can be a lot of damage. What we want to do is define that path, work with the person, and get them on the right path and help them avoid the landmines that exist.
Evidence and Guidance You Can Trust
Work With a Team Focused on Your Best Interest
Our approach is grounded in research, transparent planning, and a clear understanding of your financial picture. If you want objective guidance for the road ahead, we are here to help.
Serving Clients in Tallahassee, Colorado Springs, and Nationwide
Smith Bruer provides fiduciary financial planning and investment management for professionals, business owners, and multi-generational families. We proudly serve clients in Tallahassee, Colorado Springs, and across the U.S., offering clarity and structure to life’s complex financial decisions.
