A fiduciary financial planner is an investment professional that gives you advice to make wise financial plans. Fiduciary financial planners are usually qualified financial planners registered by the Securities and Exchange Commission (SEC). These planners are often obligated to put the clients’ interests as the priority. They are also required to act in good faith and try their best to seek the best terms and prices. All relevant facts should be available to clients with accurate and thorough advice. Besides, a fiduciary financial planner should avoid conflicts with interests to clients and they are not allowed to use clients’ assets for personal reasons.

There are mainly four different types of fiduciary financial planners: Registered Investment Advisers (RIA), The Department of Labor (DoL) Fiduciaries, Certified Financial Planners (CFP), and other voluntary fiduciaries.

Registered Investment Advisers (RIA)

Registered investment advisers give guidance and plans to high-net-worth individuals on investment (mainly buying and selling securities) and help manage clients’ portfolios. RIAs are required to unconditionally offer investment advice that suits the clients’ best interests.

The Department of Labor (DoL) Fiduciaries

DoL fiduciaries mainly serve retirement investors. These planners work according to the DoL fiduciary rule, which leaves no room for planners to conceal any conflicts of interests. DoL fiduciaries can give recommendations or suggestions in terms of retirement plans.

Certified Financial Planners (CFP)

Certified financial planners generally provide all kinds of financial plannings, including taxes, insurances, estate plannings as well as retirement plans. The CFP Board demands that planners should often abide by a fiduciary duty, yet the specific requirement can vary depending on different circumstances.

Voluntary Fiduciaries

Voluntary fiduciaries are often planners who decide to work as personal or third-party advisers. They usually provide services or advice tailored to customers’ needs. They help clients avoid costly investment errors, mitigate risks. Qualified voluntary fiduciaries are mostly members of the National Association of Personal Financial Advisers (NAPFA).

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