What’s the Difference between a Daily Money Manager & Fiduciary?

As a daily money manager I get that question a lot. Both provide important financial-related services to their clients. Both have professional distinctions. Both hold positions of trust. So what’s the difference? I’ll happily explain the differences as well as the circumstances when we work together.

What does a Daily Money Manager Do?

The range of services that Daily Money Managers offer can vary widely. As the name implies, we help our clients manage their finances by organizing paperwork, paying bills, and assisting with tasks like preparing documents for financial advisers, estate planning attorneys or tax accountants. Our work tends to focus on bills, budgets and record keeping but that list certainly isn’t exhaustive. I’ve helped clients untangle bill collection issues, getting medical expenses reimbursed from insurance agencies, to identifying ways to save on bank fees.

To be clear, daily money managers do not  take the place of these professionals:

• CPAs, tax advisers or tax preparers
• Financial Advisers
• Attorneys

What is a Fiduciary?

A professional fiduciary is licensed by a state’s Department of Consumer Affairs. A license is required for professionals who act as a private conservator, guardian, trustee or agent under durable power of attorney for health care or finances. As you can probably tell, a professional fiduciary is legally appointed to act on behalf of another. Here’s how the California Department of Affairs explains a fiduciary’s role:

  A Professional Fiduciary manages a client’s personal affairs, including daily care, housing and medical needs and finances, ranging from paying bills to handling investments and trusts.

Someone may choose to hire a fiduciary to administer a trust or help a loved one who is physically or mentally impaired. Or, you might hire a fiduciary to administer your trust if you don’t have or want to burden your family or friends with carrying out your wishes should you die or become unable to manage your day-to-day life.

Main Difference Between a Daily Money Manager and Fiduciary

A fiduciary can provide similar services (like bill paying), but their role involves legal decision making for their clients because they are unable to make those decisions themselves. Legal documents are required for a fiduciary to be appointed as a guardian, conservator, health care agent, etc. A fiduciary can make decisions that affect where a client lives, their health treatment as well as manage how their money is invested and allocated.

A daily money manager helps you maintain control of your finances. While we may advise on important information and alternative solutions, you retain full decision-making and financial control. We simply help manage the details and keep things organized. A daily money manager is a great choice when you want to:

• Alleviate the stress of keeping your financial life organized
• Save time so you can focus on other things
• Save money because your accounts are reviewed and reconciled consistently

Are you ready to take control of your financial life? Then please contact us for a free phone consultation.

Photo credit: Thomas Galvez