A financial advisor can be held to one of two standards: fiduciary or suitability. While a financial advisor held to a fiduciary standard will give you the most appropriate financial advice they are qualified to give, an advisor held to a standard of suitability will give you information that can be compromised from a conflict-of-interest. For the client seeking a financial planner, choosing a financial advisor who acts as a fiduciary is the preferred option. Yet, many financial advisors are held to a looser standard of care: suitability. The fiduciary financial advisor will never ask themselves, “how can I generate the biggest sales commission from this client?”
A fiduciary is someone who is tasked with putting your interests ahead of their own. If you are seeking the services of a financial advisor, you want the best information to help you achieve your financial goals – be it budgeting in retirement, savings for a child or grandchild’s education, or selling your business. A financial advisor working as a fiduciary may better help you accomplish your financial goals because they will only have your interests in mind.