The practice of overseeing the finances or personal well-being of another dates back thousands of years. Nevertheless, many consumers do not fully understand the meaningful role that professional fiduciaries play in many of life’s most important circumstances. This article presents the value that professional fiduciaries bring to matters requiring ultimate trust and reliability.
Merriam-Webster dictionary explains “fiduciary” this way:
Fiduciary relationships often concern money, but the word fiduciary does not, in and of itself, suggest financial matters. Rather, fiduciary applies to any situation in which one person justifiably places confidence and trust in someone else and seeks that person’s help or advice in some matter. The attorney-client relationship is a fiduciary one, for example, because the client trusts the attorney to act in the best interest of the client at all times. Fiduciary can also be used as a noun for the person who acts in a fiduciary capacity. The words are all faithful to their origin: Latin fidere, which means “to trust.”
Professional Fiduciaries are individuals who are paid to manage the financial matters and overall well-being of another person—often when that person is incapable of managing their own affairs. Fiduciaries provide the experience, resources and knowledge to oversee a myriad of services. A few examples are: paying bills and overseeing legal matters, investment management, medical care, and housing.
Professional Fiduciaries are licensed and regulated by the State of California. They must follow a strict code of ethics. They are bound by the California Probate Code and answer to the Court. Professional Fiduciaries are ultimately responsible for the actions of anyone they hire to assist with managing a client’s needs, including investment companies and realtors. The high standards that fiduciaries adhere to are a welcome component of the services they provide.
Some may reasonably ask: “But what about cost? A family member can do this for free.” Fiduciaries typically work for either a percentage or hourly rate, based on the scope of services provided. The fact is, even devoted, well-meaning family members may not have the knowledge, time, or experience necessary to successfully manage a loved one. Additionally, as neutral parties, professional fiduciaries can diffuse or referee interpersonal conflicts that often arise within families. That “cost savings” can be immeasurable.
