Paul Meloan – Vested Interest

A while back, Tara Bernard wrote a piece in the New York Times outlining a simple pledge that all financial advisors should be willing to make.

Somehow it had escaped my attention until now, but reading it persuaded me that the principles are basic enough to be understood by any layman (ie, someone who doesn’t work in wealth management every day).

You can see the original in the link, and I have edited it somewhat to apply more directly to our practice at Aegis.

The Fiduciary Pledge

I, Paul A. Meloan, and my firm Aegis Wealth, pledge at all times to act in good faith in the best interests of our client as a fiduciary.

We will provide written disclosure, in advance, of any conflicts of interest which could reasonably compromise the impartiality of our advice.

We receive no fees as a result of any transaction, and we have never paid compensation to anyone referring clients or client transactions to us.

We are compensated for our services by our clients and no one else.

This pledge covers all services provided.

Our Take

If anything Ms. Bernard’s pledge could be made more simple and comprehensive, which is what I believe our edits accomplish. I recognize that not everyone organizes their practice in this fashion and while I won’t say it makes them bad actors I will say that I would not entrust them to guide me with my life savings.

The benefit of the pledge is its simplicity. A fiduciary acts in the best interests of the client all the time, everywhere. It’s all encompassing, and controls every aspect of the advisor-client relationship. It’s the only way we have ever done business at Aegis since we opened the doors in 2005.

If you’re working with an advisor now, ask her about being a fiduciary and whether she would be willing to make the pledge we just did. If the advisor draws a pay check from a big Wall Street brokerage then don’t waste your time: they have never been fiduciaries and employ lobbyists to prevent the law from requiring them to become fiduciaries.

Otherwise, ask away. The answer should be short and simple. If not, I would suggest it’s time to look elsewhere.

Paul Meloan is the co-founder and co-managing member of Aegis Wealth Management, LLC, in Bethesda, Maryland USA. Before Aegis Paul was a practicing attorney as well as working in the tax practice of Ernst & Young, LLP.

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