Does Fiduciary Equal Lower Cost? | American Funds

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Capital Group Policy Spotlight

July 28, 2016

Does Fiduciary Equal Lower Cost?

Acting in a fiduciary capacity does not obligate an advisor to choose a product based solely on price. It’s an important distinction. At Capital Group, we have long said price alone is not a solid indicator — the combination of price and stronger long-term results is more significant.

Video

Featuring

Clarke Camper

Transcript

Clarke Camper: Acting in a fiduciary capacity does not obligate an advisor to choose a product based solely on price. It’s an important distinction because I think many have concluded that if you’re acting in a fiduciary capacity, really price is the only determination. However at Capital Group, we have long said — and I believe most of the industry agrees — that really price alone is not a solid indicator. You need price and performance. You need the combination of low price and high performance. That’s really what we’re aiming at. 

The important thing — and that, I think, infers the challenging thing — for many financial advisors is going to be finding, in their new fiduciary capacity, the right place there on the continuum between price and performance. Where is the right place that actually puts their clients’ best interests first? That most certainly is not just the lowest cost product.


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This material is intended for use by financial professionals or in conjunction with the advice of a financial professional.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing. 

Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and not to be comprehensive or to provide advice.