What Is a Fiduciary, Really? (And How to Tell If Your Financial Advisor Actually Is One)
The word fiduciary gets tossed around a lot in the financial world. Kind of like “financial advisor”—a title that should mean something specific, but over time has turned into a catch-all for just about anyone offering money advice.
So let’s clear things up.
When we say we’re fiduciaries, it means something very real. And if you’re meeting with an advisor, you deserve to know if they mean it too—or if they’re just using the word because it sounds good in a brochure.
So… what is a fiduciary?
At its core, a fiduciary is someone you trust to act only in your best interest. That’s it. No hidden agenda. No side deals. No product-pushing for a commission.
Now here’s the catch: anyone can claim to be “acting as a fiduciary” in a given moment. But only some professionals are required to do it at all times. Some examples include (but are not limited to):
CERTIFIED FINANCIAL PLANNER™ professionals (like me!)
Advisors at Registered Investment Advisor (RIA) firms
These folks have a legal—and ethical—obligation to always put first the interests of their clients.
It may be a confusing difference, but it’s an important one. Because just like with most things in personal finance, the nuance matters.
What does a real fiduciary look like in action?
Here’s what you should expect from someone who truly has your back:
1. They give you options—even when making a recommendation.
You might hear something like, “We could go with Option A or Option B. Both work, but I recommend A because it gets you closer to your goal faster.”
2. They’re upfront about conflicts of interest.
A good advisor will say something like, “Full transparency—Option A pays me a little more, but I still believe it’s best for you because of XYZ.”
3. They explain the tradeoffs.
For example, “This CD has a better rate but locks up your cash for six months. This high-yield savings account is more flexible but earns less interest.”
That’s what fiduciary behavior looks like—in real conversations, not just in marketing copy.
Want to know if the advisor you're meeting with is the real deal? Ask these questions:
“Are you a fiduciary at all times when working with clients?”
This gets straight to the point. Some advisors only act as fiduciaries in certain situations. You want someone who does it 100% of the time.“How are you compensated, and do you get commissions for anything you recommend?”
In my opinion, comissions create a greater potential for conflicts of interest. While it’s almost impossible to completely avoid conflicts of interest, a relationship with a fee-only advisor helps reduce compensation-related issues.“Can you share a time you didn’t recommend the option that would have made you more money?”
This one’s powerful. A real fiduciary won’t hesitate (I’ve got a few examples right on the top of my head for this one).
Final Thought:
If you're trying to figure out whether an advisor is a good fit—even if it's not us—we’ve put together a free guide on hiring a financial advisor that walks you through what to look for. You can grab it [here].
Because who you trust with your money should never be a mystery.
Until next time,
John Howe-Wemett, CFP®, MSFP
