A fiduciary standard of care is the highest degree of business responsibility a person or company can have to another. It means that a registered investment advisor must place their client’s interests ahead of their interests. Any conflicts that may cause the advisor to put their interest first must be eliminated or clearly explained to you, so you can decide whether they are acceptable.
A long-standing federal law, the Investment Advisers Act of 1940, requires Registered Investment Advisors to meet this fiduciary standard of care.
Be aware that many companies and their employees that call themselves advisors are not Registered Investment Advisors and are, therefore, not bound by a fiduciary standard.
Regardless of who you work with to provide financial and investment advice, we recommend making sure that they are either bound or agree, in writing, to work under a fiduciary standard of care 100% of the time.