Shuttleworth & Company 
Investment Advisors



What is a fiduciary?

Fiduciary comes from the Latin word for confidence, trust. A fiduciary must act for the benefit of the person to whom he owes a fiduciary duty, to the exclusion of any contrary interest. This simply means that a fiduciary is always required to put their client’s interests first and expose all conflicts of interest to the client. It is one of the most important issues a person needs to consider when they are looking for investment advice. The concept is not difficult, but one that many financial professionals are reluctant to talk about with their clients.
These “financial professionals” such as stock brokers, registered representatives, and insurance professionals do not have a fiduciary duty to their clients. They are generally held to the standard called “suitability.” They are only required to have a reasonable basis for believing that an investment meets a client’s needs and objectives. They are also permitted to choose an investment that will earn them a higher commission, but not necessarily be the best choice for their client. Clearly suitability is a much lower standard than “best interest of the client.”

SCO does not take custody or have direct access to any client investments. An independent third party such as a brokerage firm or bank trust department will always safeguard a client's assets. No client will ever be asked for cash or to write a check to SCO. We assist clients with opening an institutional account with a trusted broker such as Charles Schwab, and then manage the investments placed into that account. Only the client can authorize the withdrawal of money from that account. SCO is a fiduciary to its clients. You will be confident that we will always act in your best interest.
What is a fee-only financial advisor?

There are two typical ways that financial advisors are compensated “fee-only” and “commission”. Fee-only simply means that all of an advisor’s compensation is received from the client, and none is paid by commissions from product sales. Advisors that are fee-only are typically compensated through a combination of hourly fees, financial planning fees, and asset management fees. Commission-based advisors receive commissions from financial companies for selling investments (such as mutual funds) and insurance products (such as variable annuities) to their clients.
Why is choosing a fee-only advisor important?
The difference is “objectivity”. Commission-based products lead to an inherent conflict of interest between advisor and client. We have all read horror stories about advisors that churn client accounts or sell clients the products that pay the highest commissions, not the products that are best for clients. Because fee-only advisors receive no commissions of any kind, we have no incentive to use products that are not in our clients’ best interest, or to recommend a product or service that our clients don’t need.

Glossary of Investment Terms