fiduciary
adjective
LAW
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1.
involving trust, especially with regard to the relationship between a trustee and a beneficiary.
"the company has a fiduciary duty to shareholders"​
FIDUCIARY vs. SUITABILITY
Do you receive financial advice to the Fiduciary Standard of Care or the Suitability standard? It's important to know.
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Deciphering the "What's What" and "Who's Who" of today's complex financial services industry can be difficult, even for the most financially sophisticated members of the general investing public. Two words: Fiduciary and Suitability, are critical in order to understand the motivation behind the person offering you financial products or advice.
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Recognizing the difference between the fiduciary and suitability standards may also help you to appreciate the level of care you receive from a trusted financial advisor. Although the distinction between the fiduciary and suitability methods of offering advice is rarely discussed by "broker-led" large financial companies, we feel it is essential for investors to know the difference.
BROKER
(the suitability standard)
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Offers products for sale from a range of products carried by the company he or she represents
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Is paid commissions calculated as a percentage of the amount of money invested into the product
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ADVISOR
(the fiduciary standard)
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Offers "best interest" taking into account the needs of each individual client
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Is paid a quarterly fee calculated as a percentage of the assets under management
