Fiduciary vs Financial Advisor: What's the Difference?
Not every financial advisor is required to act as a fiduciary at all times. This comparison helps you choose a trusted financial advisor with clear standards.
| Category | Fiduciary Advisor | Non-Fiduciary Model |
|---|---|---|
| Legal Duty | Must put client interest first. | May only need to meet suitability standards. |
| Conflicts | Conflicts should be minimized and disclosed clearly. | Conflicts may be present depending on compensation model. |
| Compensation | Often fee-only or transparent fee structures. | May include commissions or product incentives. |
| Best Use | Comprehensive long-term planning and accountability. | Can fit specific product transactions. |
Questions to ask before hiring:
- Are you a fiduciary at all times for my account?
- How are you paid, and what conflicts exist?
- What credentials and oversight apply to your advice?