Fiduciary Status

Fiduciary is a legal term that means the advisor holds a position of trust in regard to your assets and the professional is held to a higher ethical standard than a non-fiduciary. When your financial future is at stake, you want a fiduciary helping you achieve your financial goals.

An advisor who owns his or her own Registered Investment Advisory (RIA) is a fiduciary. So is an Investment Advisor Representative (IAR) who works for an RIA. However, just because RIAs and IARs are fiduciaries doesn't mean they acknowledge their legal responsibilities. In fact, some advisors have language in their client agreements that state they are not fiduciaries because they don't want to be liable for the quality of their services. You have to be sure your advisor acknowledges he or she is a fiduciary in regard to the services they provide to you.

You should only select an RIA or an IAR as your advisor. There is a high probability non-RIAs and non-IARs are sales representatives who are paid commissions to sell you investment and insurance products.