Fiduciary vs Suitability: How to know if your advisor puts you first

This is my third post in a series about what to look for when choosing a financial advisor. In the first one, I talked about different billing models and why it is important to know how your advisor gets paid. The second post was about trying to understand what their credentials and designations were all about. In this post, I am going to dive a little deeper into what it means to be a fiduciary and why it should be an important distinguisher when you are deciding what type of advisor you want to work with.

The term "fiduciary" gets thrown around fairly loosely by advisors, but many clients don’t actually understand what it means in the financial industry. It refers to the standard of care an advisor is legally held to when working with you. Different types of advisors are held to different standards of care.

There is a difference between “fiduciary” and “suitability,” and depending on your job within financial services, you are required to use one or the other. What do these terms actually mean? And how can they impact the advice you receive — or the products you're sold?

In this post, I’ll break down the difference between these two standards, and why it matters who you're taking advice from.

What Is a Fiduciary?

A fiduciary is someone who is legally and ethically required to act in your best interest at all times. That means:

• Recommending what's best for you, not what pays them more

• Disclosing any conflicts of interest

• Putting your financial well-being ahead of their own compensation

Professionals who follow a fiduciary standard are held to a much higher bar than those who only have to recommend something “suitable.”

The CFP® Fiduciary Standard

As a CFP® professional, I’m required to act as a fiduciary whenever I provide financial advice — no exceptions. This standard is enforced by the CFP Board and applies across all areas of planning, including:

• Investment strategies

• Insurance guidance

• Retirement planning

• Tax and estate planning

Being a fiduciary means:

• Giving advice that’s in your best interest

• Explaining risks, fees, and options clearly

• Avoiding or fully disclosing conflicts of interest

This isn’t just an ethical choice — it’s a professional obligation backed by education, certification, and accountability.

What About Insurance Agents and Stockbrokers?

This is where things can get confusing.

Many financial professionals — including insurance agents and stockbrokers — are only required to follow the suitability standard.

That means the product they recommend must be appropriate for your situation, but it doesn't have to be the best or most cost-effective option.

For example:

• An insurance agent may recommend a life insurance policy that pays them a higher commission — even if there’s a similar one with lower fees.

• A stockbroker might suggest a mutual fund with high internal costs, even when a lower-cost index fund would work just as well.

They’re not necessarily doing anything wrong — but they’re not required to put your best interests first unless they're also acting as a fiduciary.

Summary: Fiduciary vs. Suitability

Here's a quick comparison:

Professional	Standard of Care	Must Act in Your Best Interest?	Disclose Conflicts?
CFP® / Fiduciary	Fiduciary (Always)	Yes	Yes
Insurance Agent	Suitability	No	Not always
Stockbroker	Suitability	No	Sometimes

Why It Matters

Choosing someone held to a fiduciary standard means you never have to wonder whose side they’re on. They’re legally and ethically bound to put your best interests first — not just sell you a product or meet a sales quota.

When you're trusting someone with your financial future, that level of accountability isn’t optional — it’s essential.

Final Thoughts

As someone who’s worked in both medicine and financial planning, I know the importance of putting people first. Just like in healthcare, financial advice should be based on what’s best for you, not what’s most profitable for the advisor.

If you’re unsure whether your advisor is a fiduciary, just ask. A good advisor won’t hesitate to give you a clear, confident answer.