Why You Need a Fiduciary to Help You Plan Your Retirement
Be sure to check a financial professional's credentials before you take his or her advice.

Planning for retirement can be one of life's most stressful events. Retirees will face changes and challenges that will impact their finances, including the death of a spouse, long-term care needs, prescription costs, inflation and other problems.
Navigating risks and knowing who to turn to for good advice can help with those challenges. Managing these hazards is increasingly important, especially as people are living longer and need more income. Many retirees think they can handle their retirement planning by themselves, but the truth is they often don't have the experience or the knowledge to manage the bigger picture of their finances.
Take Social Security, for example. Retirees have questions about when they should take Social Security and what their options are. When retirees have these kinds of questions, it's helpful to have a seasoned financial adviser in their corner who can provide them with information regarding claiming strategies.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Retirees would be well served if they could find a fiduciary to help craft the decisions that impact their retirement. However, too many retirees overlook the backgrounds and professional credentials of their advisers. They find, often too late, that there are major differences between fiduciaries and non-fiduciaries when it comes to the advice they can offer and how they are paid.
What Is a Fiduciary?
Retirees should ask potential advisers about their licenses and whether they are registered with the SEC Investment Adviser Public Disclosure site and with a Registered Investment Adviser firm. If an adviser has a Series 65, 66 or is a Certified Financial Planner (CFP) and is registered with the SEC Investment Adviser Public Disclosure site and a Registered Investment Adviser firm, then he or she has a fiduciary responsibility.
A fiduciary, who is either an Investment Adviser Representative or a Registered Investment Adviser, can give advice and charge a fee instead of a commission. Fiduciaries have a "duty of care" role, which requires them to give advice in the best interest of their clients and to monitor their investments, weighing risks and being open about any conflicts of interest. Fiduciaries also present all their fees upfront. Investors can look advisers up, see if they are fiduciaries and verify their registrations at www.adviserinfo.sec.gov.
Some fiduciaries focus solely on investment consulting, helping their clients find the right stocks, bonds and mutual funds and monitoring their portfolios. Many investors prefer to have a wealth manager serving as a fiduciary, consulting on investments and incorporating advanced planning such as wealth preservation, wealth transfer, wealth distribution, Social Security, Medicare and handling legal documents prepared by an attorney. With a more comprehensive approach, wealth managers generally utilize advanced planning techniques with customized plans. They look at the entire estate instead of just investments.
What Is a Non-Fiduciary Broker/Agent?
Non-fiduciary brokers or agents are limited on the guidance they can offer based on the licenses they have. For example, insurance agents are licensed to sell insurance products, but not securities such as stocks, bonds or mutual funds. Brokers with Series 7 licenses are able to sell stocks and bonds but not insurance products. Series 6 or 63 licenses allow the sale of mutual funds and variable annuities, and Medicare agents can sell insurance supplement plans—all of which are paid on commission. These brokers and agents are not required to disclose all of their fees or their conflicts of interest. That being the case, I believe it's certainly possible that they may not be acting in the absolute best interest of their clients.
Non-fiduciary brokers and agents work with clients on a suitability standard. While the product may be suitable, it still may not be in the client's best interest. Sales charges may be undisclosed, except in a prospectus hidden in the legalese. Non-fiduciary brokers and agents also have little further obligation to monitor a client's investments.
Still, there are some safeguards. The U.S. Labor Department, beginning April of 2017, will require financial advisers to act in a fiduciary capacity and in the best interest of their clients in regards to any qualified plans such as 401(k)s, IRAs, 403(b)s and Roth IRAs.
It's important for investors to realize that both fiduciaries and non-fiduciaries have a role to play in retirement planning, even if they're considerably different. Investors, especially those at or near retirement, should never make assumptions. Ask good questions and make sure any adviser is required to act in your best interest.
Mark Pruitt is the founder, president and CEO of Strategic Estate Planning Services, Inc., in Dallas, Texas. He is an Investment Adviser Representative and insurance professional.
Kevin Derby contributed to this article.
Investment Advisory services offered through Global Financial Private Capital, LLC an SEC Registered Investment Advisor. SEC registration does not imply any certain level of skill or training.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Mark Pruitt is the president and CEO of Strategic Estate Planning Services, Inc. Based out of Dallas, Texas, he serves on the National Summit Advisory Board and is a speaker for the National Association of Insurance and Financial Advisors (NAIFA). Mark was selected as National Advisor of the Year by Senior Market Advisor in 2012. He is an Investment Adviser Representative and insurance professional.
-
Stock Market Today: Stocks Stable as Inflation, Tariff Fears Ebb
Constructive trade war talks and improving consumer expectations are a healthy combination for financial markets.
-
What Trump’s 'Big Beautiful Bill' Means for Your Utility Bills
If passed, the 'Big Beautiful Bill' could make home energy upgrades more expensive and raise monthly costs. Here's how much more you might pay and how to prepare.
-
Eight Estate Planning Steps to Protect Your Loved Ones (and Your Legacy)
Two-thirds of Americans don't have an estate plan. If you're one of them, these are the essential steps to take now to prevent problems for your family later.
-
The Six Pros This Adviser Says You Need to Sell Your Business
Selling your business isn't as simple as getting the best price and walking away. These are the six professionals you'll need to get a deal across the finish line.
-
The Three C's to Financial Success: A Financial Planner's Guide to Build Wealth
Consistency, commitment and confidence in your chosen strategy are more critical to your financial success than finding the 'perfect' financial plan.
-
A Financial Adviser's Guide to Solving Your Retirement Puzzle: Five Key Pieces
If retirement's a puzzle you're struggling with, try answering these five questions. The answers will guide you toward a solution.
-
You're Close to Retirement and Cashed Out: How Do You Get Back In?
If you've been scared into an all-cash position, it's wise to consider reinvesting your money in the markets. Here's how a financial planner recommends you can get back in the saddle.
-
After the Disaster: An Expert's Guide to Deciding Whether to Rebuild or Relocate
Homeowners hit by disaster must weigh the emotional desire to rebuild against the financial realities of insurance coverage, unexpected costs and future risk.
-
A Financial Expert's Tips for Lending Money to Family and Friends
What starts as a lifeline can turn into a minefield if the borrower ghosts the lender. Following these three steps can help you avoid family feuds over funds.
-
What the HECM? Combine It With a QLAC and See What Happens
Combining a reverse mortgage known as a HECM with a QLAC (qualifying longevity annuity contract) can provide longevity protection, tax savings and liquidity for unplanned expenses.