A Standard Built Around Client Interests
When an advisor is acting in a fiduciary capacity, they are required to place the client’s interests first when providing investment advice. That means recommendations should be made with the client’s needs, objectives, risk tolerance, and financial picture in mind. For clients, understanding when the fiduciary standard applies can help create clearer expectations before starting a financial relationship.
The Fiduciary Standard Depends On The Service
The fiduciary standard does not automatically apply to every role an advisor may perform. It is typically tied to specific advisory relationships, such as when an advisor is acting as an Investment Advisor Representative or providing investment advisory services. In other situations, different standards may apply, including a suitability standard. That is why it is important to ask how an advisor is acting, what services are being provided, and what standard applies to those services.
When do you act in a fiduciary capacity?- Are you acting as an Investment Advisor Representative?
- What services are considered investment advisory services?
- How are you compensated?
- What conflicts of interest should I understand?
- What standard applies if you recommend insurance, retirement plans, or other financial products?
- How often will we review my plan or investments?
