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Achieving Goals

BrightPlan Recertified for Fiduciary Excellence (And Why You Should Care)

After another annual audit, we are pleased to announce our CEFEX certification has been renewed.

December 10, 2018 • 3 minute read
BrightPlan Blog

One of the first things I noticed when I started to work in this industry is how hard it is for the average investor to know who is looking out for the investor and who is more focused on making a buck.

The biggest surprise to me was that not all financial professionals are legally required to work in your best interest. I guess that would be ok if it was easy to determine who is required to do so and who isn’t, but alas, that is not always the case.

One of the things that makes it hard is all the different titles out there. Most average investors probably do not know that many titles are marketing with little official meaning and no regulation.

So, someone calling herself an estate planner, wealth manager, consultant, or even financial advisor may be a salesperson pushing products that generate the highest commissions or fees for herself.

So, what should an investor do?

Work With an Advisor That Must Act in Your Best Interest

The good news is that there is a type of advisor that is required to act in your best interest. They are called Registered Investment Advisers (RIA) and are legally required to act in your best interest. While giving investment advice, all RIAs are required legally and ethically to act as a fiduciary to clients.

So what is a fiduciary? A fiduciary owes clients a duty of undivided loyalty and good faith. In other words, you can trust a fiduciary to have your back, just like you trust your doctor, lawyer or accountant. This same standard does not apply across the financial industry.

While RIAs must operate under the fiduciary standard, other financial firms adhere to different standards. Unfortunately, it’s not always clear when you are – or aren’t – working with a fiduciary in the financial world.

Being a Fiduciary and RIA is Great… Certification Provides Additional Comfort

BrightPlan is an RIA, which means we are Registered with the Securities and Exchange Commission (SEC) and held to the fiduciary standard. The SEC conducts audits to determine whether an RIA is meeting regulatory requirements. But the SEC is busy, so the average audit cycle for advisors is 13 to 14 years.1

A few RIAs take their fiduciary responsibility seriously enough to get annual reviews and certification by a third party such as the Centre for Fiduciary Excellence (CEFEX). CEFEX is an independent organization that assesses and certifies RIAs for fiduciary excellence.

CEFEX certification can help clients determine the trustworthiness of their advisor. Through independent annual audits, CEFEX verifies that a firm continues to embrace best fiduciary and professional practices in the industry. They review advisors for the following practices:

  • Adhering to legal requirements and industry standards
  • Diversifying investments according to the risk/reward profile of clients
  • Clearly setting expectations with clients
  • Communicating roles and responsibilities
  • Using and monitoring prudent experts
  • Properly controlling and accounting for investment expenses
  • Avoiding prohibited transactions
  • Properly managing conflicts of interest

Being a Trusted Advisor is Core to BrightPlan

Many financial firms don’t have a reputation for putting clients first, because sadly they don’t. Marthin started BrightPlan to bring transparent and trustworthy financial advice to the average investor.

To help us follow best practices for putting clients first, we committed to an annual review of BrightPlan’s business practices by CEFEX.

That’s why last year BrightPlan became the first CEFEX-certified digital advisor. And now after another annual audit, we are pleased to announce that our certification has been renewed.

Whether you’re working with BrightPlan or another financial advisor, it’s important to know you’re getting unbiased advice. So first, check to see if you’re working with an RIA. And then, ask your advisor the steps they’ve taken to put your interests first.


[1] Why Annual Audits Matter, CEFEX.org: https://www.cefex.org/advisor/verified-by-annual-audits.shtml 

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