As a fiduciary, it is your responsibility to choose appropriate asset classes for an investor’s portfolio and implement a justifiable investment strategy. Most fiduciaries employ modern portfolio theory, one of the most widely used methods for creating investment portfolios that target a specific risk/return profile. Once you have chosen an appropriate investment strategy, you should formalize your efforts by creating an investment policy statement. This statement contains all of the information needed to implement the strategy.
Fiduciary work is difficult, and you may have to work with a professional in order to obtain the best results. While family members may be able to manage many aspects of a client’s estate, they often lack the specialized knowledge and skills that a professional fiduciary may have. Additionally, they may be overwhelmed by the amount of fiduciary work required of them, which can lead to conflict and inefficiency.
Professional fiduciaries may also act as a bridge between a client and his family, allowing the fiduciary to look at the situation objectively and determine the best course of action. These professionals are trained to ensure that the interests of their clients are served and are able to make rational decisions. They are also required to be trustworthy and willing to assume the responsibilities of their role.
Investment advisers must act in the client’s best interest, and must avoid potential conflicts of interest. Their advice should be as detailed and thorough as possible, and advisers must disclose any conflicts of interest. As a fiduciary, they must put their client’s interests first, and choose the highest quality and lowest cost investments for their clients.
