Fiduciary
Definition
Someone legally required to act in your best interest, not their own. A fiduciary financial advisor must prioritize your needs. A non-fiduciary advisor can recommend products that benefit them (higher commissions) instead of you.
Why It Matters
Not all financial advisors are fiduciaries. A non-fiduciary might recommend a high-fee mutual fund because they earn a fat commission. A fiduciary must recommend what's best for you. Always ask: 'Are you a fiduciary 100% of the time?'
Example
Non-fiduciary advisor recommends a 1.2% expense ratio fund earning them 0.5% commission. Fiduciary advisor recommends a 0.04% index fund with no kickback. Same investment result, but fiduciary saves you $10,000+ in fees over 20 years.
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Pulsafi definitions are sourced from primary regulatory and industry references. See our methodology and data sources.