5 Questions to Ask Your Financial Advisor About Fiduciary Duty

Kimberly Green | 2026-04-03

5 Questions to Ask Your Financial Advisor About Fiduciary Duty Most people don't know whether their financial advisor is legally obligated to put their interests first. That's a problem. The difference between a fiduciary and a suitability standard can cost you thousands in hidden fees and conflicted recommendations. Why Fiduciary Duty Actually Matters Here's the gap: under the suitability standard, an advisor just needs to recommend products that aren't totally wrong for you. Under fiduciary duty, they have to recommend what's actually vetted for your situation. That's not a small difference. An advisor earning a 5% commission on a loaded mutual fund might sleep fine recommending it under suitability rules. A fiduciary can't, even if the commission is tempting. Real math example: if you have $500,000 to invest, a suitability advisor might recommend a fund with a 2% expense ratio that pays them a 1% finder's fee. Over 20 years, that's roughly $200,000 more in fees than a 0.5% fiduciary option. The advisor gets paid. You get lighter. The stakes are real. Before you hand over your money, you need to know which standard your advisor operates under—and whether they mean it. Question 1: Are You a Fiduciary 100% of the Time, or Only in Certain Contexts? This is the question that separates the real fiduciaries from the pretenders. Get the answer in writing. Some advisors are fiduciaries only when they're providing retirement advice. For everything else—brokerage accounts, insurance products—they drop back to suitability. That's not the full protection you're looking for. Others claim fiduciary status only when they're earning fees, but switch to suitability when selling products. It's a legal loophole, and it happens more often than it should. The ones worth working with say "fiduciary for all investment advice" without hedging. Write it down. You'll need it later if something goes sideways. Question 2: Do You Earn Commissions on Products You Recommend? Commissions and fiduciary duty rarely coexist cleanly. If your advisor earns a 3% commission on Insurance Product A and 0.5% on Insurance Product B, both of which would work for your situation, which one do you think gets recommended? Fiduciary duty doesn't magically eliminate this incentive—it just means they're supposed to fight it. Some advisors are "fee-only," meaning they charge you a flat fee, hourly rate, or percentage of assets. They earn nothing on the products they recommend. That's not a guarantee of good advice, but it removes one major conflict. Ask directly. A transparent answer tells you a lot...