As a Registered Investment Adviser, Cunningham Wealth Management is held to a fiduciary standard. That is, the firm and its representatives are obligated to always act in the best interest of our clients. In our opinion, that is the way it should be.
Unfortunately, not all financial professionals are held to a fiduciary standard. Brokers, their representatives, and other financial salespersons such as insurance agents are held to the more lenient suitability standard. That is, they are obligated to recommend transactions that are suitable to a client, but that may not necessarily be in their best interest. If you are somewhat confused about the difference between the two, you are not the only one.
Therefore, we operate under the following five fiduciary principles as outlined by the Committee for the Fiduciary Standard:
We will always put our client’s best interest first
We will act with prudence; that is, with the skill, care, diligence and good judgment of a professional
We will not mislead clients; and will provide conspicuous, full and fair disclosure of all important facts
We will avoid conflicts of interest
We will fully disclose and fairly manage, in the client’s favor, unavoidable conflicts
The following illustrative example often helps:
You are a single person with no children looking to buy your first car. The option in your best interest would likely be a small to midsize sedan with good fuel economy and low long-term maintenance costs.
However, the car salesperson working with you makes a larger commission selling a luxury, seven-seat SUV and, as such, recommends this vehicle to you instead. In this case that SUV would be a suitable recommendation. It is, after all, a car and will provide you transportation, albeit at a much higher cost, but that recommendation is certainly not in your best interest, as the sedan would be.
We're not car salesmen. We believe that the suitability standard provides an inherent conflict of interest which can often cause harm to individuals. We want to always do right by you.