I 💖 Fiduciary

I 💖 Fiduciary

February 13, 2024

Check out my contribution to an article published in Fiduciary News...

I 💖 Fiduciary
by Christopher Carosa February 13, 2024

As another Valentine’s Day comes upon us, our thoughts bring forth images of red roses, romantic meals, and sumptuous chocolates that come in heart-shaped boxes. Oh, yeah, and devious cherubs with those oh-so-innocent “who me?” smiles responsible for all this silliness.

But is it really that silly? Maybe, just maybe, Valentine’s Day (and all it entails) offers the greatest lesson of them all: The importance of being a fiduciary.

Being in love is a lot like being a fiduciary. Nothing shows this more when love leads to the ultimate fiduciary relationship: marriage.

Seriously. If love and marriage go together like a horse and carriage, they also go together like finance and fiduciary.

“After seven years of marriage, and over a decade in the investment industry, it’s clear to me that the biggest similarity between a fiduciary relationship and a marriage is that they should ‘have your back,’” says Dave Fortin, of FutureMoney in Boston, Massachusetts. “A good partner wants the best for you, and sees your success as their success. It is not self-interested. Fiduciaries puts their client’s best interest before their own. In a successful marriage, you sometimes need to make sacrifices so that your partner or the relationship overall is better off.”

When you speak to financial professionals about how marriage corresponds to acting as a fiduciary, you’ll see familiar descriptions popping up with amazing consistency.

“In both a fiduciary relationship and a marriage, there’s an underlying expectation of trust, loyalty, and acting in the best interest of the other party,” says Taylor Kovar, CEO & founder of Kovar Wealth Management in Lufkin, Texas. “Just as a fiduciary must prioritize their client’s needs above their own, partners in a marriage vow to support and uphold each other’s well-being and interests.”

“The similarities between fiduciary and marital relationships are notable,” says Avis Berg, the chief investment officer at Berg Capital & Co in Houston, Texas. “In both cases, trust, transparency, and acting in the other party’s best interests are most important. Just as spouses owe each other a duty of care and loyalty, fiduciaries must act in the best interest of their clients, putting their financial well-being above all else.”

If you drill down to the fundamentals of each relationship, you see they’re made of the same stuff.

“In a fiduciary relationship, such as that between a financial advisor and a client, the fiduciary duty of ‘best interest’ requires the advisor to prioritize the client’s needs and goals above their own interests,” says Cliff Ambrose, Founder & Financial Advisor, Danvers, Massachusetts. “Similarly, in a marriage, spouses have a fiduciary duty to each other, which entails being honest, supportive, and making decisions that consider the well-being and happiness of their partner. Both relationships require open communication, transparency, and a commitment to acting with integrity, ultimately fostering a strong foundation built on trust and mutual respect.”

Indeed, if you look at the actual words that go into defining each of these bonds, you end up with contracts that aren’t that far apart. Of course, an argument can be made that marriage offers significantly better side benefits.

“In both a standard fiduciary relationship and a relationship within a marriage, there are the standards of duty of loyalty and care, as evidenced by both laws relating to the fiduciary duty of ‘best interest’ and the standard vows that read ‘to have and to hold from this day forward, for better, for worse, for richer, for poorer, in sickness and in health, to love and to cherish, until parted by death,’” says Lauren A. Klein, attorney and co-owner of Flourish Law Group, PLLC, with offices in Fort Lauderdale and St. Petersburg, Florida. “However, unlike the phrase ‘happy wife, happy life,’ the phrase ‘happy trustee, happy beneficiary’ just doesn’t have the same ring.”

All kidding aside, Valentine’s Day is more than cards, candy, and Cupid. It’s about renewing a vow to treat each other with the highest fiduciary standard.

“Both fiduciary relationships and marriages are built on a foundation of mutual respect, care, and a dedication to acting in the best interest of the other,” says Richard Bavetz, investment advisor at Carington Financial in Westlake Village, California. “While the contexts are different—one being primarily legal and financial, and the other personal and emotional—the underlying principles of Trust, Loyalty, and a Commitment to the other’s welfare are remarkably similar, highlighting the universal importance of these values in building strong, lasting relationships.”

And if you have any doubts, just wait until you have kids. Then you’ll really understand the meaning of “Fiduciary.”

“The Fiduciary Duty of Care is like our responsibility to protect our young children,” says Ron Surz, president of Target Date Solutions in San Clemente, California.

Next Up: Do classic movies unknowingly promote the fiduciary standard?

Christopher Carosa is an award-winning online news producer and journalist. A dynamic speaker, he’s the author of 401(k) Fiduciary Solutions, Hey! What’s My Number? How to Improve the Odds You Will Retire in Comfort, From Cradle to Retirement: The Child IRA, and several other books.