Question hub
Common questions about fiduciary advisors.
Plain-English answers to what investors actually ask before they hire someone. No jargon, no marketing.
Fees & Cost
What advisors charge and how to compare structures.
- Do fiduciary advisors charge commissions?True fee-only fiduciary advisors do not charge commissions. Fee-based advisors hold a fiduciary duty AND earn product commissions on the side.
- How much does a fiduciary financial advisor cost?Fee-only fiduciary advisors typically charge 0.50% to 1.25% of assets, $2,500 to $10,000 flat retainers, $200 to $500 hourly, or $1,500 to $5,000 per project.
- What are 12b-1 fees?12b-1 fees are annual marketing fees baked into a mutual fund's expense ratio. They pay the broker who sold you the fund, every year, in perpetuity.
- What is a 1% AUM fee?A 1% AUM fee is a yearly charge equal to one percent of the assets your advisor manages, so $10,000 a year on a $1 million account.
- What is the best fee structure for a financial advisor?Flat retainers fit complex households. AUM fits big invested portfolios. Hourly fits one-time advice. Avoid commission-based at all costs.
- What is the difference between fee-only and fee-based?Fee-only advisors are paid only by clients. Fee-based advisors charge a fee AND earn commissions. The labels look alike on purpose: they aren't.
Fiduciary Standards
Fiduciary, suitability, Reg BI: what they actually mean.
- Are bank financial advisors fiduciaries?Most bank financial advisors are licensed brokers operating under Reg BI, not fiduciaries. A small minority work in the bank's separate trust or wealth-management division as Investment Adviser Representatives.
- Are insurance agents fiduciaries?No. Insurance agents are licensed by state insurance departments and operate under a suitability standard, not a fiduciary one. They are paid commissions by the insurer that issues the policy.
- Are Vanguard advisors fiduciaries?Vanguard's Personal Advisor Services and Wealth Management are fiduciary advisory programs. The brokerage side of Vanguard is not a fiduciary.
- Can my financial advisor sell me commission-based products?Yes, if your advisor is a broker, dual-registered, or fee-based, they can be paid commissions on the products they recommend. A fee-only fiduciary cannot.
- Is an RIA the same as a broker-dealer?An RIA gives advice and owes a fiduciary duty. A broker-dealer sells products and follows Reg BI. The two are regulated under different laws.
- Is Edward Jones a fiduciary?Edward Jones is mostly a broker-dealer, not a fee-only fiduciary. Some advisory programs apply a fiduciary duty, but most accounts run under Reg BI.
- Is Fidelity a fiduciary?Fidelity acts as a fiduciary in some accounts and as a broker in others. The duty depends on the service tier, not the firm name.
- What is a fiduciary financial advisor?A fiduciary financial advisor must legally put your interests first. Most advisors aren't fiduciaries: here's what to look for.
- What is a Registered Investment Adviser (RIA)?A Registered Investment Adviser (RIA) is a firm registered with the SEC or a state regulator under the Investment Advisers Act of 1940. RIAs owe a fiduciary duty.
- What is fiduciary breach and what are the remedies?A fiduciary breach is a violation of an advisor's legal duty of loyalty or care to a client. Remedies include disgorgement, rescission, damages, regulatory penalties, and bar from the industry.
- What is the difference between suitability and fiduciary?Suitability lets a broker pick any product that is not unsuitable. A fiduciary must pick what is best for you. The legal duty is the difference.
How To
Practical steps for finding and vetting an advisor.
- Do I need a fiduciary for my 401(k) rollover?A 401(k) rollover is one of the highest-stakes decisions in your financial life. A fee-only fiduciary will tell you when not to roll over.
- How do I find a fiduciary financial advisor near me?Use a directory that screens against SEC and FINRA filings, not paid placement. Confirm fee-only on Form ADV before booking a call.
- How do I read a Form ADV Part 2A?Skip to Item 5 first: fees and compensation. Then read Item 12 on brokerage practices. Those two cover most of what matters in ten minutes.
- How do robo-advisors compare to fiduciary human advisors?Most major robo-advisors are Registered Investment Advisers and operate under the same fiduciary standard as a fee-only human advisor, but their advice is algorithmic and narrow.
- What questions should I ask a fiduciary financial advisor?Ask the seven questions below before you hire any advisor. The answers reveal fiduciary status, fee model, conflicts, and the planning process.
- What's the difference between a wealth manager and a financial planner?There's no legal definition for either title. "Wealth manager" usually signals investment-led service to higher-net-worth clients; "financial planner" usually signals planning-led service across the full picture.
Verification
Form ADV, CRD lookups, and what the records show.
- How do I check an advisor's disciplinary history?Use FINRA BrokerCheck and the SEC's IAPD database. Both are free, and together they cover almost every advisor in the United States.
- How do I file a complaint against a financial advisor?Complaints against an advisor go to the regulator that licenses them: the SEC or the state for Investment Advisers, FINRA for brokers, the state insurance department for insurance agents. To recover money, you file a claim, usually FINRA arbitration for brokers or a lawsuit for others.
- How do I know if my financial advisor is a fiduciary?Three ways to verify your advisor is a fiduciary: ask in writing, look up their CRD on the SEC site, and check how they get paid.
- How do I verify an advisor on FINRA BrokerCheck?BrokerCheck shows registration, employment history, and any disciplinary events for advisors who are or were registered with FINRA.
- What is Form ADV?Form ADV is the public SEC filing every Registered Investment Adviser must submit. It discloses fees, services, conflicts, and disciplinary history.
- What is the SEC Marketing Rule and why does it matter for advisor reviews?The SEC Marketing Rule, in force since November 2022, is the first time Registered Investment Advisers can use client testimonials in marketing, but only with strict disclosures about the relationship and any compensation.
Credentials
CFP, CFA, CPA, ChFC: what each one means and signals.
- Is a CFA the same as a fiduciary?A CFA charterholder follows the CFA Institute Code of Ethics, which includes a duty of loyalty to clients, but the CFA designation alone is not the same as the legal fiduciary duty under U.S. securities law.
- Is a CFP the same as a fiduciary?A CFP® is required to act as a fiduciary when giving financial planning advice, but not every CFP works at a fee-only fiduciary firm.
- Is a CPA also a fiduciary?A CPA is not automatically a fiduciary. Some CPAs hold the PFS credential or work at fee-only RIAs and act as fiduciaries: most do not.
- What credentials should a financial advisor have?CFP® is the strongest baseline for personal finance. CPA, CFA, and EA add tax or investment depth. Avoid alphabet-soup designations.
- What is the difference between CFP and CFA?CFP® is for personal financial planning. CFA is for institutional investment analysis. The two credentials cover different jobs, despite the overlap.
- What's the difference between the Series 65 and the Series 7?The Series 65 is the licensing exam for fee-only investment advisers. The Series 7 is the licensing exam for stockbrokers who sell securities for commission.
When & Why
Life events that justify hiring a financial advisor.
- How do I switch financial advisors?Hire the new fee-only fiduciary first. They handle the ACATS transfer. Most accounts move in 5 to 10 business days, in kind, with no tax bill.
- How much money should you have before getting a financial advisor?Most AUM advisors require $250K-$1M. Hourly and flat-fee fiduciary advisors have no minimums and serve smaller balances well.
- Is a financial advisor worth it?A fee-only fiduciary advisor is worth it when the value they add (taxes, planning, behavior) clears the fee. Most non-fiduciary advisors are not.
- Should I fire my financial advisor?Fire your advisor if they are not a fiduciary, charge hidden commissions, ignore your goals, or perform poorly relative to fees. Switching is easier than you think.
- When should I hire a financial advisor?Hire a fee-only fiduciary advisor when your situation gets tax-complex, a major life event lands, or you need a buffer against your own behavior.
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