Fiduciary Services


Hiring a financial advisor – whether an independent advisor, stockbroker, trust company, wealth manager, etc. - is a very serious step for anyone. In all likelihood, you will transfer much, and perhaps all, of your liquid net wealth into the management and effective custody of your advisor, and your advisor will make recommendations for those investments that will have years - even decades and generations - of ramifications for you and your loved ones. Because of the seriousness of this relationship and its effects, you are entitled to have your questions answered before you formally enter the relationship.

pocketwatch.jpgThe world of financial advice has become very complex and confusing. Many different companies representing many different types of businesses spend enormous sums of advertising money in order to convince the public to deposit their assets. With all of these companies vying for your attention, how do you understand what they do, much less which one to choose to help you?

I believe there is one key issue that prospective clients should understand when seeking an investment advisor: is the advisor a fiduciary? A fiduciary is a legally defined relationship between one entity (the fiduciary) and another (the beneficiary), in which:


1. The fiduciary places the beneficiary’s interests first

2. The fiduciary prudently manages the beneficiary’s affairs

3. The fiduciary discloses potential conflicts of interest


It sounds simple, and you might assume that all financial advisors are fiduciaries. But you would be wrong. Very wrong.  If you are not sure if your current or prospective advisor is a fiduciary - ask them.  Let’s look at some common types of advisors:

  • Stock Brokerages (Merrill Lynch, Edward Jones). These companies are the “traditional” face of Wall Street to many Americans. They began as retail, commission-based stock and bond houses, populated with sales-oriented stockbrokers. Commissioned stockbrokers’ incentives are not always aligned well with client needs.
  • Discount Brokerages (Charles Schwab, TD Ameritrade, E-Trade). These companies developed when commission prices were deregulated in the 1970’s, and then again when the Internet made online trading possible. They offer “do it yourself” investing to retail customers, but customers who need and want a greater degree of personal service may not find it here.
  • Retail Banks (JP Morgan Chase, Citibank, Bank of America). Among the oldest and largest financial institutions, these companies try to extend their retail or commercial banking relationships into investment management relationships. However, the caliber and training of traditional bank personnel does not always translate well to the more demanding needs of an investment client.
  • Investment Banks (Goldman Sachs, Morgan Stanley). These companies are primarily advisors to corporate clients, providing securities underwriting, transactions, and trading desks. They have supplementary, but significant, private wealth management services. These organizations leverage their corporate work by offering “Wall Street connected” products and services, often with higher transaction and management costs, and are mostly interested in the extremely wealthy.
  • Mutual Fund Houses (Fidelity, Vanguard, T. Rowe Price, Janus). These companies began as purveyors of mutual funds, and later added broader retail platforms to build relationships directly with customers. Like discount brokerages, they tend to offer discounted trading, but may not be able to provide the deeper and broader level of service required by investment clients.
  • Insurance companies (Prudential, AIG, John Hancock, Pacific Life, AXA). These companies try to leverage their ongoing relationships in insurance into relationships in investments. They often offer their own mutual funds (although their performance tends to lag that of the mutual fund houses) and their advisory personnel does not tend to be as capable on the investments side.
  • Money managers (Fayez Sarofim and Company, Private Capital Management, Century Management). These companies focus on fund and account management using more specialized approaches. They leverage their funds into fuller client relationships. However, they may not offer complete diversified solutions from their own specialized in-house funds, and clients may therefore lack adequate diversification.
  • Trust Companies (Northern Trust, TCW) Trust companies tend to focus on administration of multi-generational wealth, including estate and trust services. While trust companies are adept at managing such structures, their investment management practices can be somewhat conservative and slow to adapt to market changes.

Independent Advisors are Entrepreneurs

And then there are independent advisors. I am an independent advisor. Independent advisors are the “entrepreneurs” of the investment management business. The movement toward independent advisors has been growing for several decades. We work for ourselves, and we pride ourselves on not just being independent for ourselves, but also for our clients.

Is An Independent Advisor Right for Me?

A relationship with an independent advisor is not like a relationship with a stockbroker, an online broker, a plan administrator, or a mutual fund house. It’s a much more personal relationship, and that may or may not be right for you.


While “more personal” may sound good, it also means that while you may have expectations of me, I will have some of you. For example, I expect that you will take an active interest in our work and be responsive to my inquiries and directives. At the same time, you are entitled to superior service, and the needs of all of my clients are paramount to me, regardless of the size of the account. I believe that a smaller client is entitled to service just as a larger client is. As an independent advisor, I prefer to keep my work personal and of the highest quality.


Unlike a broker, I look at a much broader range of your financial issues – not just stocks and bonds – including your income and expenses, taxes, real estate and mortgage financing, estate plans, charitable plans, education plans, and retirement plans. I may help you with issues related to your business (I have a Masters in Business Administration) or employment, and may produce extensive documents for you including investment policy statements and financial plans. Many of my clients seek my advice to help clarify their thinking before they buy a new home, start a new business, change their jobs, or go through a life event like a wedding or divorce. I am often a steady, simplifying voice for transactions that can otherwise be confusing and upsetting.


I am not compelled to offer or recommend any financial product that does not meet a client’s needs. Whereas stockbrokers are generally given a list of securities to sell by their managements, and in which they may well have a financial interest, I am free to obtain any security to meet a client’s needs.


Additionally, an advisor who has a supplemental life planning practice – as I do – doesn’t just look at financial issues. My practice is also interested in your personal and life issues, as those are often the most important aspects in determining a financial plan. I have extensive training and practice in helping clients investigate their own personal beliefs and practices around money, and in helping them identify and move beyond counterproductive beliefs or behaviors that may be holding them back from fulfilling personal goals. There are few – if any – other advisors in Houston with the training and experience to provide this valuable approach. 

Smaller Can Be Better

Independent advisors tend to be smaller businesses, but don’t let that fool you. Just because the advisor is smaller, doesn’t mean that the service is smaller. Often, an independent advisor has access to a greater variety of investment products and services than institutional advisors. The reason is simple: because larger institutions have large numbers of employees, they must create a smaller menu with more restricted offerings so that their employees can effectively offer the products and services. In essence, institutions have to program their investment management to their “lowest common denominator” employees. A qualified independent advisor has no such restriction – they can offer whatever is best for the client, including custom offerings. An independent advisor is uniquely positioned to work solely in your interests, and to guide you to the best solutions for your particular situation. 

Independent Advisors Are More Flexible

An independent advisor has remarkable flexibility, far greater than institutional companies. They can put some of your money with a great mutual fund, some with a great private money manager, some with an investment bank private offering, they can arrange for insurance relationships, for legal, trust, and estate solutions, and they can arrange custodial and trading relationships with brokerages or banks. Importantly, you will experience great stability with an independent advisor. Because independents work for themselves, you will rarely find them “quitting” and going elsewhere, which is often the case with institutional advisors where frequent poaching and high employee turnover occurs. In contrast, the world of independent advisory is more stable for clients. 

No Conflicts of Interest

Significantly, very often an independent advisor is also paid independently. This means that there is no conflict of interest between what is best for you and your wealth, and the advisor.

Independent advisors are able to create their own visions of how investment management should be. In my own case, I believe that meetings with clients should be stress-free, and held in a relaxed, soothing environment that enables a client to “get away” and feel free to be forthcoming about their goals. Usually, several meetings will be necessary to fully understand needs. I believe that in order to do a good job, I must have a complete and full picture of a client’s entire financial profile.

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