What It Really Means to be a Wealth Steward

In the wealth management industry today there’s more competition for clients than ever before. As you try to attract the most valuable clients, it’s critical to set yourself apart as a true steward of your clients’ wealth, as opposed to simply being a wealth manager who adheres to the Fiduciary Standard.


The Fiduciary Standard as the Baseline

Some wealth managers sell themselves as strict supporters of the Department of Labor’s recently proposed Fiduciary Standard, thinking it’s the highest level of responsibility in a client relationship. But that standard is only the basic starting point for a valuable long-term relationship. The standard, set to be codified before the end of the Obama presidency, is comprised of six specific value statements:

  1. Put the client’s interests first
  2. Act in good faith
  3. Act with prudence and good care
  4. Never mislead a client; always give clear, conspicuous, and full disclosure
  5. Avoid all conflicts of interest
  6. Always manage and resolve conflicts or discrepancies in the client’s favor

At First Rate, we believe the Fiduciary Standard is the bare minimum, and investment clients have the right to expect much more from their wealth manager. We also believe that wealth managers who subscribe to a higher standard of care for their clients will have longer and more successful relationships.

Wealth Stewardship That Goes Beyond the Standard

Being a wealth steward entails all the values that are found in the Fiduciary Standard, and goes beyond each in a way that adds value and personalization to the client-manager relationship. Being a wealth steward means you spend the necessary time educating your clients about how to reach their specific investment goals.

A wise steward is also very attentive to the role risk plays in each portfolio. Each client has a specific tolerance or aversion to risk. Therefore, your communication must also be very specific about the role of risk and how it applies to setting and meeting goals.

When the Fiduciary Standard is applied to every wealth manager in the near future, you’ll need a way to differentiate yourself from your competitors. One of the best differentiators in any competition is quality service, and you should seek out the tools that allow you to enhance your services.

Use the CORE Solution to Differentiate Your Services

First Rate CORE is uniquely positioned to support your business as you prepare to adopt the Fiduciary Standard. It offers a superior set of features and functionality that will set you above the competition. There are three specific areas where the CORE solution will help you serve your clients better.


CORE at its heart, is a calculation engine. All client data is gathered automatically from its disparate sources and made available for your reporting needs. This allows you to provide information on client portfolio returns in a way that makes sense to each individual client and simultaneously deepens your relationship with them.

With the power to produce custom reports, your ability to address specific client goals is enhanced. Now you can talk about performance and returns from both a time- and money-weighted perspective.

A money-weighted reporting method will allow you to show portfolio performance in the client’s terms, as opposed to whether the manager outperformed the market benchmark. The personal perspective produces long-term relationships.

Goal-Based Reporting

Using money weighted reports, you can show each client how you are addressing their individual investing goals. We all know every client is different, and they have different ends in mind—some are retirement focused while others have philanthropic goals. Some want to save for education while others want to travel.

Having goal-based conversations will allow you to show your clients exactly how their investments performed against their own goals.


Transparency is paramount in the financial industry; it’s the basis for the Fiduciary Standard and serves several other essential functions: Transparency:

  • decreases compliance issues significantly
  • helps show progress toward goals
  • helps educate clients about different methods and tactics used to reach goals
  • educates clients about risk, and how risk impacts the ability to meet goals

The transparency provided by First Rate CORE allows you, as a wealth manager, to report on all facets of the client relationship in a personal and meaningful way. CORE gives you the ability to go beyond the Fiduciary Standard baseline, toward an enhanced ability to provide custom reporting that shows performance in a light that matters deeply to the client.

Customizing your deliverables will differentiate you and your firm in a way that will engage your clients, and bring new ones through referral and family business.

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