Is My Financial Advisor a Fiduciary?
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Source: SEC Form ADV, updated monthlyEducation, not advice
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Educational only. Firm answers come from each firm's own Form ADV filing with the SEC or its state. A firm record is not a review of any one person.

Fiduciary Report Card

Does your adviser act like a fiduciary?

The records tell you how a firm is registered. These ten yes-or-no questions are about how your adviser actually works with you. You get a grade from A to F and a list of what to ask. About one minute, no sign-up.

A checklist, not a rating of any adviser's skill or results. We are an adviser too, so weigh it with that in mind.

Fiduciary or "best interest": what the words mean

"Financial advisor" is a job title anyone can use. What matters is how the person is registered, because that decides the rules they work under.

  • An investment adviser is a fiduciary. The SEC says the duty has two parts, care and loyalty, and that it "applies to the entire relationship" between the adviser and you, not just the day you buy something. The Supreme Court set that duty in 1963 (SEC v. Capital Gains Research Bureau, 375 U.S. 180). Sources: SEC interpretation IA-5248 (2019), pages 1 and 9.
  • A broker must act in your best interest when making a recommendation. That is the SEC's Regulation Best Interest. The rule says "at the time the recommendation is made." It is a real protection, but it is tied to the recommendation, not to watching over you between sales. Source: 17 CFR 240.15l-1(a)(1).
  • Many firms are both. The same person can act as your adviser on one account and as your broker on another. Ask which one they are for each account you hold.
  • Insurance and annuity sales run under state insurance rules, not the adviser rules above. If an annuity is in the picture, ask who is paid on it and how much.

Every registered adviser and broker that works with everyday investors must hand you a short relationship summary called Form CRS. It says in plain words how they are paid and what conflicts they have. Advisers must give it to you before or when you sign up (17 CFR 275.204-5). If you never got one, ask for it.

How the checker reads a firm's record. Every registered adviser files Form ADV. We read these answers from it: whether the firm is also a broker-dealer or its staff are registered brokers (Items 6.A and 5.B(2)), whether it has a related broker-dealer or insurance company (Item 7.A), whether it can be paid by commissions or a share of gains (Item 5.E), and whether it reports any disciplinary events (Item 11). Data: the SEC's Investment Adviser Public Disclosure files for SEC- and state-registered firms, refreshed monthly. Firms that only report institutional clients are left out.

What you get for our fee

We are a fiduciary at all times, on all the advice we give you. We take no commissions. One fee covers two jobs: planning your whole financial life, and managing your investments.

1. Your financial plan, built with you and checked every year

It starts with understanding your situation, the way it really is: your pension, your 457, your family and what you want the money to do. Then we follow the same seven steps that CFP Board sets for financial planning:

  1. Understand your situation. Your pension, 457, savings, debts, insurance, family and benefits.
  2. Set your goals with you. When you want to stop working, the income you need, and what you want to leave behind.
  3. See where your current path leads, and what the other paths look like.
  4. Build our recommendations.
  5. Walk you through them in plain words, so you know why, not just what.
  6. Help you put them in place: opening accounts, moving money, updating beneficiaries.
  7. Meet once a year to check progress and update the plan when your life or the rules change.

Where the plan starts: your numbers. We build your budget and cash flow (what comes in and goes out each month) and your balance sheet (what you own and what you owe). Those two pages drive every other decision in the plan.

How we test it. We plan around your goals, such as retiring at a certain age or paying for a child's college. Then we run scenarios, like retiring a year later or taking a different pension option, and a Monte Carlo test. That test runs your plan through thousands of possible market paths to show how often the money lasts. It shows the odds, not a promise.

Example: "Should I move my 457 when I retire?" This is how a goal moves through those seven steps. First we look at where you stand: your income statement and your balance sheet, and what your 457 costs you today. Then we compare leaving the money in the plan with moving it to an IRA: the costs, the investment choices, how you would draw income, and the rules each one has for taking money out before 59 and a half. If staying is better, we tell you, and we earn nothing on that money. If moving makes sense, we have the money sent straight from the plan to the new account and map out how you draw on it. You pick the path, we help put it in place, and we check it at every yearly meeting. This is an example of the process, not a promise of a result.

What the plan covers:

  • A second opinion on what you have now. A free 15-minute look at what your current adviser or broker has you in and how they are paid, whether or not you ever move.
  • Retirement income. When to draw from your pension, 457, IRAs and savings, in what order, and when to claim Social Security.
  • Tax planning. Which account to draw from first, staying in lower tax brackets, and Roth conversions in low-income years.
  • 457, 401(k), 403(b) and TSP rollovers. If moving the money makes sense, we have it sent straight to an IRA we manage. That avoids the 20% tax withholding that comes with a check made out to you. Sometimes leaving the money in your plan is the better choice, and we will tell you when it is.
  • Insurance planning. Making sure your life, disability, long-term care and home coverage fit the risks you actually have. We do not sell insurance and take no commissions.
  • Estate planning. Your beneficiaries, account titles, will and powers of attorney, checked so they all say the same thing as your plan.

2. Your investments, managed all year by Will Harrison

Will Harrison, our Chief Investment Officer, runs the portfolios, and most of the work is research you never see. He studies and follows the companies we own and the ones we might own: their results, their managers, and the trends around them. He decides what to buy, when to add, and when to sell, and he writes up his thinking every quarter in Inside the Portfolio. His approach:

  • He owns good businesses. Companies with steady cash flow, strong returns, an edge competitors struggle to copy, and managers who own a real stake.
  • He thinks in years, not quarters. He judges each holding on what it can earn over three to ten years, not on the latest headline.
  • He buys when others are scared. When a price falls but the business is still doing well, he adds to it.
  • He keeps risk in check. New ideas start small, winners get trimmed when better ideas come along, and he will not chase the biggest names just because they dominate the index.

Day to day, the portfolio work also includes:

  • Rebalancing. When markets push your mix off target, we bring it back. That means trimming what went up and buying what went down, which is hard to make yourself do.
  • Tax-loss harvesting. When an investment in a regular taxable account is down, we can sell it to lock in the loss and buy something similar so you stay invested. The loss can cancel out taxable gains, and up to $3,000 a year of other income, with the rest carried to later years. It does not apply inside IRAs or 457s, where there is no tax on gains to save.
  • Watching for wash sales. The IRS throws out the loss if the same or a nearly identical investment is bought within 30 days before or after the sale, and that includes buys in your IRA or Roth IRA. We plan the replacement purchase around that window so the loss counts.
  • Putting each holding in the right account. Investments that pay a lot of taxable income go in IRAs, where they grow tax-deferred. Ones that are taxed lightly go in taxable accounts.

What research says advice is worth

Vanguard's research estimates that advisers who follow practices like these can add about 3 percentage points a year to net returns. The biggest piece, about 1.5 points, comes from coaching people to stay invested when markets drop. Vanguard is clear that this is not a steady yearly number. It shows up unevenly, mostly when markets panic or soar, and it varies a lot from person to person. These are Vanguard's estimates across many investors, not a promise of what we will add for you. Sources: Vanguard Advisor's Alpha and its research paper (February 2019).

How we are paid

We charge a percentage of what we manage, and we take no commissions. From our Form ADV brochure, Items 5 and 6:

  • 1% a year for first responders, active military, reserve and veterans.
  • 2% a year for other clients with accounts under $1.1 million.
  • Over $1.1 million: 0.5% a year plus 25% of profits above a 4% return.

The fee is taken from your account each month for the month before. Trading costs and the funds' own expenses are separate. Because of that last tier, our own record in the checker shows "can charge a share of gains." How your adviser gets paid, in full.

A conflict you should know about. We earn our fee only on money you move to us. That gives us a reason to want your money. Weigh what we say about your current adviser with that in mind.

Who we are

Sirmium Capital LLC is a small, independent investment firm in New York, registered as an investment adviser with the State of New York. You can look us up on the SEC's public adviser database under CRD #167682, where our full brochure is posted. Want to try the checker on us first? Search "Sirmium" above.

Common questions

Look up the firm on the SEC's adviser database, or use the checker above, which reads the same records. A firm registered only as an investment adviser is a fiduciary across the whole relationship. A firm that is also a broker-dealer can be either, account by account. Then ask your adviser to say in writing whether they act as a fiduciary on every account you hold.
A fiduciary has to put your interests first for as long as they advise you, and tell you about conflicts. That is a stronger promise than a duty that applies only at the sale. It does not guarantee good results or low costs, so still ask what you pay in dollars and what you get for it.
The checker covers registered advisers that report working with individual clients. If yours is missing, try a shorter version of the name, then search FINRA's BrokerCheck: the person may be registered only as a broker, or may sell insurance only. Neither is a fiduciary duty in the adviser sense.
Not always. Item 11 counts events tied to the firm or anyone who works there, and large firms with thousands of staff often report some. Read what each one was, how it ended, and when, in the firm's full Form ADV on the SEC's site.

Educational information only. Not investment, tax or legal advice, and not a recommendation for or against any firm. Firm details come from public Form ADV filings and can change; confirm them on the SEC's adviser database. Sirmium Capital LLC is a New York state-registered investment adviser and is not registered with the SEC. Registration does not imply a certain level of skill or training.