Decisioning gone fiduciary

By Ernest Falkner III

Zillion Dollar Thinking

Question: Should commission sellers get a fiduciary pass?


fi•du•ci•ar•y [noun]

Various definitions:

A person or a legal entity who holds assets or information as an agent-in-trust for a principal or owner.

An individual, corporation or association holding assets for another party, often with legal authority and the duty to make decisions, regarding financial matters on behalf of the other party.

One, such as an agent of a principal or a company director, who stands in a special relation of trust, confidence, or responsibility in certain obligations to others.

To name only a few obligations of fiduciaries:

Fiduciaries have a duty (due care) and responsibility to act principally on behalf of their client's best interest.

Fiduciaries must always act in complete fairness and may not ever exert any influence or pressure, take selfish advantage, or deal with the client in such a way that it benefits them or prejudices the client.

Fiduciaries are prohibited from exerting business shrewdness, hard bargaining, or taking advantage of the forgetfulness, negligence or lack of expertise of a client.

Fiduciaries, as financial planners, must make fair and complete disclosure of all material facts and must employ reasonable care to avoid misleading their clients.

Fiduciaries must exhibit the highest form of trust, fidelity and confidence, and are expected to act in the best interest of their clients at all times.

“The distinction between a certified financial planner with a fiduciary interest and a salesperson is crucial.”

A certified financial planner, generally under common law (and some statutes), is a fiduciary.

A certified financial planner must always provide services and advice in the best interests of the client. A fiduciary must serve the client, if necessary, at the cost of the fiduciary's own interests.

Conversely, salespeople may have their own motives and interests at heart as they offer goods and services for a price that generally includes a commission.


The issue of fiduciary standards becoming a requirement for stockbrokers, agents and various others is still a subject of continuing debate. Point is, with this criteria as a backdrop, and if you are a prospect, and as a part of your own due diligence, why would you not decide on an expert who is committed (in writing) to being held to the fiduciary standard?

The alternative could be that if the commission sellers, by their own volition, choose (decide) to abide by and commit to applicable fiduciary standards; they indeed could be someone you could put your trust in. And, like a voluntary army who believes in their mission, if the commissioned folks take this kind of responsible initiative, the buying public (over time) may come to trust and believe that this self-government will ultimately be in their best interest. After all, who needs or wants more government intervention?

Again … you decide.

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