Fiduciary vs. financial advisor: how do these types of advisors compare?

1 min read by Unbiased team Last updated June 14, 2024

Understand the differences between fiduciaries and financial advisors and discover the optimal fit for your unique financial needs and aspirations.


  • Fiduciary duties refer to the legal and ethical obligations that fiduciary financial advisors must fulfill in prioritizing their client's best interests. 

  • Clients can determine if their advisor is a fiduciary by asking questions, reviewing documentation and clarifying the compensation structure. 

  • Unbiased will connect you with a fiduciary financial advisor, guaranteeing impartial guidance tailored to your financial goals. 

What is a fiduciary? 

A fiduciary is a financial professional bound by fiduciary duties to act solely in the client's best interests.  

Fiduciary duties refer to an advisor's obligation to avoid conflicts of interest and explain the risks and benefits of recommended products. 

Are financial advisors fiduciaries? While all fiduciaries are financial advisors, not all advisors are fiduciaries. The fiduciary standard imposes a higher level of responsibility, ensuring you receive optimal advice.  

What is a financial advisor? 

A financial advisor assists in managing your money and reaching your financial goals. They cover areas like retirement planning, investment management, tax planning, and estate planning.  

Financial advisors hold certifications like Certified Financial Planner (CFP), Chartered Financial Analyst (CFA), or even titles like investment advisor or wealth manager, and their primary goal is to help clients achieve their financial objectives through strategic planning and informed decision-making. 

As mentioned, financial advisors can be fiduciaries, but not all are. It’s important to double check if your advisor is a fiduciary before working with them.  

What is the difference between a fiduciary and a financial advisor? 

Both a fiduciary and a financial advisor are there to guide you on your financial journey, but key differences set them apart: 

  • Duty of care: Fiduciaries are legally bound by their fiduciary responsibilities to prioritize the client’s best interest and avoid conflicts of interest. Not all financial advisors hold to this standard. Some only ensure recommendations suit your needs, but they are not necessarily the best option available. 

  • Services offered: Fiduciaries and financial advisors offer a wide range of services but differ in focus. Fiduciaries emphasize comprehensive financial planning and transparent client education. 

  • Fees: Fiduciary advisors typically operate on a fee-only basis, charging a flat fee or a percentage of assets under management. This structure minimizes conflicts of interest, as fiduciaries don’t earn commissions from product sales. Conversely, some financial advisors earn commissions on sold products, potentially leading to biased recommendations. 

How do you determine if your advisor is a fiduciary? 

Finding out if your advisor is a fiduciary is crucial for ensuring they act in your best interest.  

Here’s how you can make that determination: 

  • Ask directly: Start by simply asking your advisor if they are a fiduciary. A fiduciary should readily confirm their status and explain what it means for your financial planning. 

  • Request documentation: Ask for a copy of their Form ADV. This document, filed with the SEC, details their fiduciary duties, services offered, fees charged, and potential conflicts of interest.  

  • Inquire about certifications: Certain certifications, like Certified Financial Planner (CFP), require adherence to fiduciary standards. Verify your advisor’s credentials to ensure they meet these requirements.  

  • Clarify compensation structure: Understand how your advisor is compensated. Fee-only advisors, who typically operate as fiduciaries, charge flat fees or a percentage of assets under management rather than earning commissions on product sales.  

Unbiased only works with fiduciary advisors. 

What are the pros and cons of working with a fiduciary? 

There are pros and cons to working with a fiduciary: 


Working with a fiduciary offers several advantages, including transparency and trust, as fiduciary duties legally bind them to act in your best interest. This fosters a relationship built on integrity and openness.  

Additionally, fiduciaries provide conflict-free advice, refraining from earning commissions from product sales, thereby ensuring their recommendations are unbiased and solely in your best interest.  

Their commitment to fiduciary duties often results in comprehensive financial planning, where they consider all aspects of your financial situation to create a cohesive strategy. 


Fiduciary advisors can charge higher fees than commission-based advisors. These fees reflect the value of unbiased, comprehensive advice but may be a concern for some clients.  

Fiduciary vs. financial advisor: which is best for me? 

Deciding between a financial advisor vs. a fiduciary hinges on your unique needs and financial goals.  

If you value transparency, trust, and comprehensive financial planning, a fiduciary might be your best bet. Their fiduciary duties mean that they are legally obligated to act in your best interest and ensure you get unbiased advice, thus providing peace of mind and a strong foundation for your financial future. 

If you do choose to work with a financial advisor who is not a fiduciary,  be mindful of potential conflicts of interest and make sure their recommendations align with your financial objectives. 

Get expert financial advice 

Understanding the differences between a fiduciary and a financial advisor can help you make informed decisions. By asking the right questions and assessing your priorities, you can select the financial professional who best matches your goals and values, setting you on the path to financial success. 

Unbiased will connect you with a fiduciary advisor for expert financial advice, ensuring your best interests are always the top priority. 


Unbiased team

Our team of writers, who have decades of experience writing about personal finance, including investing and retirement, are here to help you find out what you must know about life’s biggest financial decisions.