How to Tell if a Financial Advisor is a Fiduciary

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Fiduciary or Non-Fiduciary? What's In It For You

Do you know if your investment advisor acts as a fiduciary?

It’s critical that, as an investor, you ask your advisor whether or not they’re a fee-only, fiduciary advisor before signing up with them for services.

A true fiduciary advisor will always be transparent, and welcome this conversation. Advisors who aren’t fee-only or fiduciary are either commission-only or fee-based - meaning they may earn commissions on the sale of financial products to their clients. This presents a conflict of interest, and can prevent the advisor from giving advice that truly puts their clients first.

So, what is the difference between a fiduciary and a non-fiduciary advisor? Let’s dive in to understand how being a fiduciary impacts the advice you receive.

Defining Fee-Only & Fiduciary

Advisors who are only compensated by their clients for services provided are able to operate without any conflicts of interest. As a result, they’re able to operate within the fiduciary standard, an obligation to do what’s in their clients’ best interest. The fiduciary standard is a legal obligation that can be taken on by financial advisors, bankers, attorneys, or public service officials.

"Trust" close up on a dollar bill

A fiduciary advisor:

1. Always puts their clients’ best interests above their own.

2. Advises fairly and honestly with the knowledge and expertise they have.

3. Shows prudent judgement in actions and advice.

4. Avoids conflicts of interest.

5. Discloses all material facts.

6. Controls investment expenses in order to help their clients keep and use the majority of their investments according to their unique financial plan.

Difference Between Fee Structures for Advisors

Advisors are compensated under three different fee structures:


Fee-only advisors are only compensated by the fees their clients pay for services.


Fee-based advisors are compensated by both fees paid by their clients and commission from the sale of products.


Some advisors are only compensated through commissions from the sale of financial products - like insurance.

The only type of firm that can take a fiduciary oath is a fee-only firm, because they only work for their clients. There is no conflict of interest created by commissions.

How Does Being a Fiduciary Benefit You?

Your personal finances are tied to everything in your life: how you live, where you work, your goals, what you’re passionate about. When you work with a financial advisor, you want to work with someone who you can trust with all of those things and more. A fiduciary financial advisor is legally obligated to put your best interest first, even ahead of their own. Their job is to advise you according to both what makes the most financial sense, and what will bring you the greatest peace of mind while moving toward your unique goals. A fiduciary can help you to look at your holistic financial picture, not just the dollars and cents of your investment strategy.

You want an advisor to look at you as more than just an addition to their sales revenue. When you have a fiduciary advisor in your corner, your relationship is built on a foundation of trust and mutual respect, not sales.

Where Can You Find a Fiduciary Advisor?

Unfortunately, the most heavily promoted online directories where investors go to find financial advisors benefit from “blurring the lines” between fiduciary and non-fiduciary advisors. This is largely because, when a pay-to-play directory is able to sign more advisors regardless of their background, they make more money. In this scenario, the investor is put in a bad situation where they may not be able to tell whether an advisor is looking out for their best interest.

The good news is that finding a fiduciary advisor doesn’t have to be a challenge. There are plenty of resources online that support the fee-only, fiduciary initiative, and vet advisors to ensure they meet strict criteria before sharing their information with investors like you. If you’re looking for a fiduciary financial advisor, you can start by using the Fee Only Network advisor search tool, where you can find an advisor near you. We also recommend exploring both NAPFA and XY Planning Network as other resources for fiduciary advisors.

Finding an advisor who puts your interests first isn’t out of reach.

Taking the time to ask advisors who you’ve worked with, or who you’re meeting for the first time, whether they operate under the fiduciary standard is the first step toward building a long-term relationship with a professional who genuinely cares about your financial wellbeing.

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