The Informed Investor

What Is A Fiduciary Financial Advisor & Why Do You Need One?

Randy Garcia, ICC Founder

March 30, 2024

When you hire a Las Vegas financial advisor, you want them to give you advice, right? Of course, that sounds like a dumb question. But unfortunately, it’s not.

Believe it or not, the financial advisor you hire may not be required to give you real advice. Instead, they might just be giving you product recommendations that are better for the seller (them) than for the buyer (you). And it’s perfectly legal.


Conflicts, Conflicts, Everywhere

Wall Street is known for a lot of things. Conflict of interest is one of them.

If you leave your money in the hands of financial advisors with conflicts of interest, you may regret it. According to a report[i] released by the White House Council of Economic Advisers (CEA), conflicted advice causes American retirement account holders more than $17 billion annually.

That figure illustrates the difference between getting true financial advice and getting a sales pitch in the form of a product recommendation. And the results can be extremely costly.


Avoid Conflicts with a Fiduciary

Fortunately, there is a way to avoid potential product recommendations veiled as advice. There are financial advisors who legally must provide you with advice that’s in your best interests (not theirs).

These advisors are called fiduciaries. “Fiduciary” is a legal term for one party obligated to act in the best interests of another. Think of hiring an attorney. They are required to do what’s best for you. They cannot work against you. Another example is a parent; parents have a fiduciary duty to put their children’s interests first.


Fiduciary, not Suitability

Fiduciary financial advisors are bound by law to always prioritize the client’s interest. Like an attorney, they must put your interests first, or there are clear legal consequences. This is referred to as the fiduciary standard.

This is very different from the product firms that often offer conflicting advice. These firms operate under a different set of regulations. Instead of putting your interests first, they just have to recommend something suitable.

Even if it costs you more—and pays them a bigger commission.


Ongoing Legislative Confusion

Because this is not a new problem, there have been several attempts to clarify this confusing situation for investors.

Most recently, the Securities and Exchange Commission (SEC) set out to create a new rule to help protect unsuspecting investors. This new rule, called Regulation Best Interest (BI), mandates that firms must inform their clients when the products they recommend have potential conflicts. Now, here’s the rub: they don’t have to tell you directly. They can package it as part of their Terms of Use or hide it in the fine print. We’ve all seen those long lists of disclosures on websites. It is doubtful that most investors would bother reading them or fully understand what they are reading.

By asking investors to find the conflicts themselves, Regulation BI has an unfortunate and unintended consequence: it gives these firms the leeway to continue giving conflicted advice. SEC Commissioner Robert Jackson criticized the regulation: “Today’s rules maintain a muddled standard. Today’s rules do not require that investors’ interests come first.” The Founder/CEO of Betterment, Jon Stein, refers to Regulation BI as a “gift of sheep’s clothing to the wolves of Wall Street.”[ii]


How to Ensure Your Financial Advisor is a Fiduciary

Rather than wonder if you’re getting real advice or a product pitch, you can avoid conflict by hiring a fiduciary financial advisor. These advisors are usually found at independent advisory firms with smaller operations than the big brands you’re familiar with. The key is that they are legally bound to always act in your best interests. While hiring a fiduciary doesn’t guarantee you’ll get good advice, it removes most conflicts of interest from the equation.

But how can you tell the difference? Especially since all types of advisors call themselves similar titles (financial advisor, wealth manager, investment consultant, etc.). Worse, some are “dual registered,” meaning they can be fiduciaries sometimes and salespeople the rest of the time.

The first thing to do is to check the company’s website; it should be stated prominently that they act in a fiduciary capacity. But to be safe, ask your advisor or prospective advisor to put a written statement that they will act as your fiduciary 100% of the time. If they refuse to do that, you have just received a powerful message that can save you a significant amount of money. Consider yourself lucky and move on.


How ICC Can Help

Looking for a fiduciary financial advisor who can help? ICC offers independent, unbiased wealth management services to both individuals and businesses. Our team provides complete transparency and ensures that client needs always come first.

If you have $5 million or more of investable assets, please visit our website:  or call us at 702-871-8510 to learn more about how we can help you achieve all that is important to you and your family.


[i] THE EFFECTS OF CONFLICTED INVESTMENT ADVICE ON RETIREMENT SAVINGS. (2015, February 1). Retrieved March 1, 2020, from

[ii] Carey, T. W. (2019, June 8). Will New SEC Regulations Change Anything for Retail Investors? Retrieved March 1, 2020, from