Fiduciary

A fiduciary owes you a duty of loyalty and care. They must put your interests first, disclose conflicts of interest, and recommend what is genuinely best for you — not what is merely acceptable, and not what pays them most.

The contrast is with the suitability standard, under which a recommendation only has to be appropriate for someone in your situation. Under suitability, a broker can steer you toward a fund paying a 5% commission when a near-identical one charging a fraction as much sits on the same shelf.

Titles do not settle it. "Financial advisor" is not a protected term, and the same person can act as a fiduciary on one part of your relationship and as a salesperson on another. Registered investment advisers are held to a fiduciary standard; brokers are generally held to a different, weaker one.

How someone is paid is the most reliable signal. Fee-only advisers charge you directly — a flat fee, an hourly rate, or a percentage of assets — and take nothing from product providers. Fee-based advisers charge you and collect commissions, which is a materially different arrangement despite the near-identical label.

The practical test is short and worth using: ask whether they are a fiduciary at all times and in writing, and ask how they are compensated. An adviser who cannot answer both plainly has answered them.