Is Your Financial Planner Acting in Your Best Interest?
Not all financial professionals are held to the same standards. Some must meet a higher bar than others. What type of adviser are you working with?


The COVID-19 pandemic created financial challenges for people across the world and led to increased demand for professional financial advice. During the height of the pandemic last April, nearly 8 in 10 CFP® professionals (78%) reported an uptick in inquiries from clients, and 1 in 3 (34%) saw an increase in inquiries from prospective clients.
As more Americans turn to financial planners to better understand their finances and develop holistic financial plans, it is more important than ever that people understand the importance of working with someone you can trust, someone who will put your interests first — in other words, a fiduciary.
But what does it mean to be a fiduciary, and how can you tell if your financial adviser is one?

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.
What Is a Fiduciary?
At a high level, the term “fiduciary” means to always put the client’s interest first. When working with a financial adviser, many people assume that’s always the case. However, that’s not always true.
The Securities and Exchange Commission (SEC) applies a fiduciary duty to Registered Investment Adviser representatives (RIAs). In addition to the fiduciary standard, two other common standards are the suitability standard and the “best interest” standard that the SEC introduced for broker-dealers in the 2019 Regulation Best Interest (Reg BI).
The suitability standard requires advisers to provide advice that is “suitable,” benefiting you but not necessarily in your best interest. For broker-dealers, the suitability standard largely was superseded by Reg BI’s “best interest” standard. But even so, the SEC has said that Reg BI is not a fiduciary standard.
These lower standards do not require advisers to place your interests ahead of their interests at all times when providing financial advice. While it is a step in the right direction, Reg BI does not do enough for investors as it draws upon the key principles of a fiduciary standard and best interest principles but does not hold advisers to a true fiduciary standard.
The CFP® Certification Difference
As part of their certification, CFP® professionals make a commitment to CFP Board to act as a fiduciary when providing financial advice. You should want a financial adviser who makes this commitment directly to you. Therefore, whomever you choose as your financial professional, including a CFP® professional, you should consider getting a written engagement that requires them to have a fiduciary obligation to you. It is a common request, and something you can feel comfortable asking for in your initial correspondence before your introductory meeting.
It is important to note that just because a financial planner is a fiduciary doesn’t mean the adviser is free of conflicts of interest. Under the Code of Ethics and Standards of Conduct, CFP® professionals make a commitment to CFP Board to address conflicts of interest that could affect the professional relationship. This means fully disclosing the conflict, obtaining the client’s informed consent, and managing the conflict in the client’s best interests. For example, when providing advice on life insurance, if your adviser receives a commission from the product being offered, the adviser need to disclose that information to you. If a particular insurance product is not in your best interests, then they need to recommend a different product.
Working with a Dually Registered Professional
A dually registered adviser is affiliated with both an RIA and a broker-dealer. Whether the SEC’s fiduciary standard applies depends on whether the professional is acting in an investment advisory capacity. The lower Reg BI standard applies when they are selling investment products as a registered representative of a broker-dealer. When working with a dually registered professional, you can ask them whether they are acting as an investment adviser representative or a representative of a broker-dealer.
There are benefits to working with a dually registered professional as they can develop and implement holistic financial plans. When working with a dually registered representative, be aware of their dual roles and know when the adviser is subject to the SEC’s fiduciary duty rather than Reg BI standard.
Finally, Do a Background Check
It is also important that you do your due diligence and see if your adviser has been disciplined publicly. The Financial Industry Regulatory Authority (FINRA) BrokerCheck Website, SEC Investment Adviser Public Disclosure Database and the Verify a CFP® Professional tool on CFP Board’s website are available to everyone.
Whether you already have an established relationship with a financial planner or are currently searching for one, it is up to you to you to get a written engagement that requires them to have a fiduciary obligation to you.
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.

Kevin R. Keller, CAE, is CEO of the Certified Financial Planner Board of Standards Inc. CFP Board sets standards for financial planning and administers the prestigious CFP® certification – one of the most respected certifications in financial services and one of the few accredited financial services designations. He leads CFP Board to benefit the public by granting CFP® certification and upholding it as the standard of excellence for competent and ethical personal financial planning.
-
Stock Market Today: Stocks Swing as Trump Scraps Canada Trade Talks
Despite a mid-afternoon slip, the S&P 500 and Nasdaq ended the day at new record highs.
-
How to Choose a Mortgage Lender in Five Steps
Not all lenders are created equal — here’s how to compare offers, rates and terms with confidence.
-
Why Smart Retirees Are Ditching Traditional Financial Plans
Financial plans based purely on growth, like the 60/40 portfolio, are built for a different era. Today’s retirees need plans based on real-life risks and goals and that feature these four elements.
-
To My Small Business: Well, I've Been Afraid of Changin', 'Cause I've Built My Life Around You
While thinking about succession planning might feel like anticipating a landslide (here's to you, Fleetwood Mac), there are strategies you can implement to manage the uncertainty and the transition.
-
These Are the Key Tariff Issues to Watch in Coming Months
While they're not dominating headlines right now, tariffs are not over. Some key dates are coming up fast that could upend markets all over again.
-
Technology Unleashes the Power of Year-Round Tax-Loss Harvesting
Tech advancements have made it possible to continuously monitor and rebalance portfolios, allowing for harvesting losses throughout the year rather than just once a year.
-
The Fiduciary Firewall: An Expert's Five-Step Guide to Honest Financial Planning
Armed with education and awareness, you can avoid unethical people in the financial industry by seeking fee-only fiduciaries and sharing your knowledge with others.
-
How Private Capital Could Be the Key to Rebuilding America
Private capital investment in infrastructure could be a more efficient and effective alternative to government funding, potentially stimulating the economy during uncertain times, creating jobs and delivering projects on time and within budget.
-
Real Estate Bridge Funds: An Expert Guide to Investing in a Volatile Market
Investors looking for passive income are buying into these funds, which offer capital to borrowers for short-term financing.
-
Bill Bought a Fridge, and Then His Nightmare Began
A Lowe's customer reached out to me after he encountered the retailer's 48-hour return window for major appliances when his brand-new fridge turned out to be defective.