Our Fiduciary Role

The Royal Military Academy at Sandhurst’s motto is “Serve to Lead”, and the final quote in its cadet lesson plan by Field Marshal Sir William Slim Courage states:

Chao & Company believes that “Serve to Lead” defines the essence of a fiduciary and how we practice every day. Our job as fiduciary advisors means that we put the interests of our clients above all, serving them with unselfishness so they have a higher probability of reaching their goals.

What we do is more than a job, a way to make a living, or a career path. Being a fiduciary consultant or a fiduciary manager is a noble profession. We share common link with professions such as teachers, firemen, soldiers and police officers in that we all serve others by placing others’ interests ahead of our own. Our greatest reward is helping others achieve their goals and manage risk.

Fiduciary vs. Suitability

While fiduciary advisors are legally and morally obligated to seek out the best solutions to meet their clients’ needs, other financial professionals such as stockbrokers operate under what’s known as the suitability standard. These other professionals are not legally obligated to put their clients first, but rather provide products and services that are merely adequate for their clients.

To illustrate this point, imagine you felt ill and went to a doctor for advice. As a fiduciary, your doctor’s job is to fully examine your symptoms, your past medical history, to run tests that eliminate false diagnoses, and eventually get you the best possible cure or prescription that is correctly dosed and minimizes side effects.

If that same doctor operated under the suitability standpoint, the level of service and scrutiny would be completely different. While they’d learn about your symptoms and past history, they might be inclined to give you a prescription that earns them a commission or bonus from their friendly neighborhood pharmaceutical rep, even if that prescription weren’t quite the best available or the most cost-effective.

At Chao & Company, we pride ourselves on our commitment to the fiduciary standard and the higher level of care that the fiduciary standard demands.

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