What is a Fiduciary?

A fiduciary is an individual or organization that has a legal and ethical obligation to act in the best interests of their clients. Fiduciaries are held to a higher standard of care and must prioritize their clients’ needs over their own.

Fiduciary relationships exist in various professions, including financial advising, law, medicine, and corporate governance. In the financial realm, fiduciaries can include financial advisors, investment managers, trustees, and retirement plan administrators.

Choosing to work with a fiduciary financial advisor can provide clients with peace of mind that their interests are being prioritized. It’s important for clients to understand the differences and select an advisor that best fits their needs and preferences.

Some key characteristics of fiduciaries:

  • They must make decisions and recommendations that maximize the financial benefit for their clients, not themselves.
  • They are required to fully disclose any potential conflicts of interest and manage those conflicts in their clients’ best interests.
  • They must perform their duties with the utmost care, skill, and diligence.
  • They are legally liable if they breach their fiduciary duty and cause financial harm to their clients.

How to Determine if Your Financial Advisor is a Fiduciary

Determining if your financial advisor is a true fiduciary is important, as it ensures they are legally and ethically obligated to provide advice that is in your best interests, not their own. Taking the time to ask the right questions can give you peace of mind that your advisor is working to maximize your financial well-being. There are a few key ways to determine if your financial advisor is acting as a fiduciary: 

Ask directly.

The simplest way is to ask your advisor outright if they are a fiduciary and if they will act in your best interests at all times. A true fiduciary advisor will have no problem confirming this.

Check their credentials.

Advisors who are Certified Financial Planners (CFPs) or Chartered Financial Analysts (CFAs) are required to act as fiduciaries. You can also look for advisors affiliated with the National Association of Personal Financial Advisors (NAPFA), which requires members to be fee-only fiduciaries.

Review their Form ADV.

Registered Investment Advisors (RIAs) are required to file a Form ADV that discloses any conflicts of interest. Review this document to see if your advisor is an RIA and how they are compensated.

Look for fiduciary language.

Many fiduciary advisors will prominently display their fiduciary commitment on their website and in their client agreements. Beware of advisors who do not clearly state they are fiduciaries.

Ask them to sign a fiduciary oath.

Some clients request their advisor sign a fiduciary oath, legally committing to act in the client’s best interests. A fiduciary advisor should have no issue with this.

Fiduciary vs. Non-Fiduciary Advisors

A fiduciary financial advisor is legally and ethically obligated to act in the best interests of their clients. This means they must prioritize their clients’ needs over their own when providing advice and making recommendations. Fiduciary advisors are held to a higher standard of care – they must provide full disclosure of all material facts, avoid conflicts of interest, and manage any conflicts that arise in the best interests of their clients.

In contrast, non-fiduciary financial advisors are only required to provide advice that is “suitable” for their clients, but not necessarily in their best interests. These non-fiduciary advisors may receive commissions or other incentives for selling certain financial products, which can create conflicts of interest.

Choosing a fiduciary advisor can provide clients with peace of mind that their interests are being prioritized. Ultimately, it’s important for clients to understand the differences and select an advisor that best fits their needs and preferences.

Key Differences:

Fiduciary Advisors:

  • Must always act in the client’s best interests
  • Required to provide full disclosure of all material facts
  • Must avoid and manage any conflicts of interest
  • Held to a higher standard of care and expertise

Non-Fiduciary Advisors:

  • Only required to provide “suitable” advice, not necessarily best interests
  • May receive commissions or incentives that create conflicts of interest
  • Not legally obligated to act in the client’s best interests

CWA’s Fiduciary Commitment

At Conte Wealth Advisors (CWA), our team of financial advisors are proud to serve as fiduciaries. As a registered investment advisor firm, we are legally required to act in the best interests of our clients at all times.

This fiduciary duty is a core part of our advisory approach. It means we are obligated to provide advice and recommendations that prioritize your financial wellbeing over our own. We must fully disclose any potential conflicts of interest, and manage those conflicts to protect your interests.

Our advisors hold the proper licenses and credentials to offer comprehensive wealth management services. This licensing requirement ensures we are held to the highest standard of care and expertise when serving our clients.

When you work with Conte Wealth Advisors, you can have confidence that your financial goals and best interests are our top priority. We are committed to providing objective, transparent advice to help you achieve financial success.

Don’t settle for anything less than a true fiduciary commitment.

Schedule a complimentary consultation today, and let’s get started on securing your financial future.
Speak With a Fiduciary Advisor