Investment Philosophy

At Fiduciary Advisors, Inc. (FAI), our focus is on managing risk and results for our clients. We do not participate in fads. We rely on our clearly defined, institutional-level investment process based on financial theory and industry best practices, derived by both quantitative and qualitative factors.

FAI incorporates principles of Modern Portfolio Theory and evidence-based research when designing a portfolio.  We focus on achieving the proper allocation of investments in order to reduce the risks inherent in investing while also working to achieve returns necessary to achieve financial objectives. 

Principles

We believe costs do matter.

The more you pay for investment management, the lower your returns.

“The expense ratio is the most proven predictor of future fund returns.”

We believe passive management (indexing) is prudent.

“The greater the trustee’s departure from one of the valid passive strategies, the greater is likely to be the burden of justification and also of continuous monitoring.”⁽¹⁾

"29% of equity and 18% of fixed income fund survived to provide benchmark-beating performance over the five years through 2015.  Over 15 years, outperformance dropped to 17% for equity funds and 7% for fixed income funds.” 

 ^{(1) The American Law Institute, Restatement of the Law Third, Trusts—Prudent Investor Rule (St. Paul, Minnesota: American Law Institute Publishers, 1992), paragraph 227, comment h.}

We believe retirement plan participants have a higher probability of success with professionally allocated portfolios.

From years of academic research and studies, we have found that the average 401(K) participant has dramatically underperformed professionally managed portfolios and the market overall.  

“By comparison, professionally managed allocations result in a narrower range of investment outcomes.”

Contact Us to discuss our evidence-based research that supports our investment philosophy.