Fiduciary Standards

"100% Fiduciary, 100% of the time" Putting client's interest first

Most investors have little idea what the term “fiduciary” means, much less whether their financial advisor operates in a fiduciary role. Many assume that their advisors will always act in the best interest of the customers. However, the legal and ethical requirement that a fiduciary always puts the client’s needs first can sometimes determine whether customers receive objective advice.

Educating customers about the importance of the fiduciary role is a priority for Grand Capital Advisors in Grand Blanc, Michigan, according to Ken Duetsch II, CFA® CFP®, president of the evidence-based Registered Investment Advisory firm.

altered1090 1“We’ll do planning and coaching for anyone,” Duetsch said in an interview with Advisors Magazine “We don’t want to turn anyone away. Often it seems that individuals with small accounts are the ones who are most hurt by bad advice.” He added the firm is open to working with clients with portfolios of all sizes. “Across the board, people need help. In our geographic area, there are not a lot of pure RIA fee-only fiduciary advisors. Grand Capital Advisors is about doing the right thing for clients as a true, full-time fiduciary.”

Duetsch said his father owned a real estate company and, while he was growing up, he enjoyed spending time working on mortgage calculations.

“My dad often brought work home and I enjoyed crunching numbers with him for prospective home buyers. Often, we’d see situations where someone wanted to buy a house with my dad, but they couldn’t afford it because they had too much debt or not enough saved,” Duetsch recalled. “I realized then that people could have benefited from better planning. So, I actually thought about financial planning before I even knew what a financial planner was.”

deutch quoteThat early interest sparked a banking and investment career spanning 30 years, including serving as chief investment officer and director of wealth management at national financial institutions. Then a year ago, Duetsch launched Grand Capital Advisors with trusted industry colleagues all sharing a mutual respect for one another.

Education is a major component of the Grand Capital approach for both existing and prospective clients. Duetsch said the firm’s structure as an independent, evidence-based RIA fiduciary supports that philosophy.

“The more we can educate people, the better it is for them and for us,” he said. “Unfortunately, people have mostly been educated by the news media, through advertisements, or by salespeople. We need to educate people to ensure they understand that the way we do business will benefit them.”

For retirement planning, Grand Capital Advisors uses a variety of strategies and models as tools to tailor their approach to each investor.

“Between the time someone comes into our office and we get a portfolio ready, there’s a lot that goes on,” Duetsch explained. “We put a lot of time and work into each of our clients because no two clients are the same. Age, current earnings, savings, existing investments, and tax planning are considered, so the processes we go through during the first year are very different for each client. Their portfolios may look similar, but the ways we got there are different and going forward, we may employ very different strategies during the spend-down periods.”

As longevity increases, Duetsch added, it is more important than ever to make clients’ retirement money last as long as possible.

KenAndClient 0481“If there’s one magic bullet we have, it’s that we are an evidence-based investment firm. By comparing the portfolios, we create versus the portfolios people usually have when they come in, it’s pretty easy to say that the results will be superior,” he said. “Improving earnings by just one percent can add many years of life to the portfolio and income for the client.”
Members of the “sandwich generation” have additional needs as they try to help their aging parents and their college-age children.

“A lot of our work is helping them budget and balance,” Duetsch said. “They have a lot of pieces to juggle. We make sure these clients have good investments that fit their needs – not just something off the shelf that was sold to them.”

For investors looking for guidance, Duetsch suggested several questions they should ask when choosing an advisor. The first is asking how the advisor will be paid.

“Fee-only is not the same as fee-based; a fee-only advisor is the much-preferred option,” he said. “Fee-based advisors can also charge commissions, and the commissions the client pays to a broker are not the only problem; it’s also the commissions they collect from others for selling the products. That’s where a lot of the conflicts come from.”

Secondly, clients should ask potential advisors to explain their fiduciary approach.

“Most of us understand a fiduciary is person who puts clients’ interests ahead of their own,” he notes “I like to say that we are 100 percent fiduciary 100 percent of the time. Many advisors act as part-time fiduciaries and the clients never know when the advisor is wearing their fiduciary hat or broker hat.”

Then ask about their professional qualifications, he continued. Have they continued their education to earn their CFA (Chartered Financial Analyst®) or CFP (Certified Financial Planner™) designations, or did they simply sit for their Series 7 exam, which is just a license to sell? Duetsch also suggests asking whether they are members of NAPFA (National Association of Personal Financial Advisors).

“NAPFA is rather selective about who they let in as a member,” he said.

As a fairly new business, Grand Capital Advisors is favorably positioned for controlled growth in the 2020s.

“We have a good pipeline of people who’ve been referred to us,” Duetsch noted. “We also limit ourselves to onboarding only so many people at a time so we don’t drop any balls during the process. We’re small, so as we bring people on, we make sure they have core values very similar to ours. At the end of the day, we hope our clients are going to feel we’ve done the right thing by them.”

For more information on Grand Capital Advisors, visit: grandcapadvisors.com

 

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