You May Be a Fiduciary if You are Responsible
For Managing Someone Else’s Money

“Am I your father or are you mine?” I was aware that my father was becoming more dependent on me, but I never realized the extent of the role reversal until he uttered that question. Dad was ninety-five and the combination of age and pain medications had dimmed a once bright mind. Although he never seemed to lose his incredible sense of logic, the confusing inputs his brain was receiving made for illogical and, sometimes, humorous outputs. His brain was always active, but you never knew if the impulse causing it to fire was an actual event or an illusionary one.

I remember one night he went on a 2:00 a.m. rampage in his rest home, going from door to door rousting the residents to go fight an imaginary forest fire. The rest home called to notify me that the paramedics had taken Dad to the hospital. I arrived at the emergency room just as the doctor was beginning his examination. When the doctor asked Dad if he knew where he was, Dad said, “I’m in a boxcar.” The doctor informed him that he was actually in a hospital and then asked, “Do you know who I am?” Dad looked at him and made no response. So the doctor asked again, “Look at what I am wearing. Do you know who I am?” Dad looked at him and then turned to the nurse with a funny grin and said, “You’d better get me another doctor, this guy doesn’t know who he is.”

Dad was always in charge. It wasn’t “his way or the highway,” it was just “his way.” And his way was rigid structure supported by his phenomenal organizational skills. That’s why he was put in charge of most all the big fires in the Western United States when he was a US Forest Service fire control officer. He could instantly organize hundreds of firefighters, dozens of fire trucks, bulldozers and other pieces of equipment, and numerous fire retardant dropping airplanes into a coordinated and effective firefighting team. After helping Dad with a tax issue, my CPA remarked, “Your dad is so organized that he makes Fred look sloppy.” And Fred was a guy in town who was legendary for his time-management practices. It was suspected that even Fred’s potty-stops were pre-scheduled in his day-timer. Knowing this, you can imagine the surprise my sister and I experienced when Dad told his attorney, “Yes, I want Guerdon to have total control of all my finances.” And then he signed the paperwork resigning as trustee of his trust and making me the sole trustee of all his assets.

According to the Center for Fiduciary Studies (also known as fi360^TM,) “the vast majority of the nation’s liquid investible wealth is in the hands of investment fiduciaries…” Most of this wealth is held in family trusts (like my dad’s), pensions, and charitable foundations. There is a very good chance that if you aren’t a fiduciary now, you will be at some time in your life. As a trustee of my father’s family trust, I was responsible for managing his money when he was no longer capable. Since the funds in the trust ultimately were distributed to me and my siblings, I was a fiduciary accountable not only to my father, but also to my brother and sisters. For the past twelve years I have been on the board of a local charity, and since that charity has an endowment fund, I am also a fiduciary for that fund and am answerable to my state’s Attorney General. In addition, as the owner of a business with a retirement plan, I am a fiduciary to the participants and beneficiaries of that plan, which is monitored by the Department of Labor. And finally, as a Registered Investment Advisor, I am a fiduciary to my clients, with my activities regulated by the Securities and Exchange Commission.

You can see from my situation that it is not unusual to be a fiduciary. However, it has been my experience that most people are not aware of what a fiduciary is and most fiduciaries aren’t even aware that they are one. As fi360 notes, “It is not uncommon for fiduciaries to be unaware of their status.” So, how do you know if you are a fiduciary? To paraphrase Jeff Foxworthy, “You may be a…” fiduciary if you are responsible for managing someone else’s money.