What is a fiduciary?
Last updated August 2026
Short answer
The word appears constantly in marketing and rarely with any detail attached. The detail is what makes it meaningful.
What the duty involves
Acting in the client's interest, which includes a duty of care and a duty of loyalty.
Disclosing conflicts of interest rather than simply avoiding some of them, since not all conflicts can be eliminated.
Seeking best execution and providing advice suitable for the client's actual objectives rather than the adviser's convenience.
Advisers and brokers are regulated differently
Registered investment advisers owe a fiduciary duty under the Advisers Act and file a Form ADV describing their business.
Broker-dealers making recommendations to retail customers are subject to Regulation Best Interest, which imposes obligations at the point of recommendation.
The distinction matters most where a relationship is ongoing, because a continuing duty and a point-in-time obligation are not the same thing.
How to check
Advisers and their Form ADV are published at adviserinfo.sec.gov; brokers appear in FINRA BrokerCheck.
Form ADV Part 2 is written in plain language and states services, fees, conflicts and disciplinary history.
Form CRS is the two-page relationship summary firms must provide, and it says directly whether they are a broker, an adviser or both.
Try it in Walnut
Walnut connects to your brokerage and analyses what you hold. It is analysis rather than advice, and it is not a fiduciary relationship.
Dual registration
Many individuals are registered as both, acting as an adviser in some interactions and as a broker in others.
The obligations differ depending on which capacity applies to a particular recommendation.
Asking which hat somebody is wearing for a specific piece of advice is a reasonable question and the answer should be immediate.
What the duty does not guarantee
Competence. A fiduciary can be wrong, and the duty concerns loyalty rather than skill.
Low cost. Fees have to be disclosed rather than minimised, and a fiduciary charging 1.5% is disclosing rather than breaching.
Outcomes. Nothing in the standard concerns performance, which is worth remembering when the word is used as a selling point.
Questions worth asking directly
Are you a fiduciary at all times, and will you confirm that in writing.
How are you paid, including anything received from third parties for recommending particular products.
What conflicts of interest exist in this relationship, which is a question a well-run firm answers without hesitation.
Why the standard exists at all
Advice is difficult to evaluate before you receive it and expensive to evaluate afterwards, which is the classic condition for a duty rather than a market to solve the problem.
The duty shifts the burden: rather than requiring you to detect a conflict, it requires the adviser to disclose or avoid it.
That is why the practical use of the word is not reassurance but a question, which is whether the person in front of you owes it and will say so in writing.
Sources
Adviser registration and Form ADV are published at adviserinfo.sec.gov, broker records at FINRA BrokerCheck, and guidance on working with an investment professional, including Form CRS, at investor.gov. Walnut is informational and is not an investment adviser. This guide is educational and not personalized investment advice.
FAQ
What is a fiduciary?
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Someone legally obliged to act in another person's interest, placing that interest ahead of their own. In investing, registered investment advisers owe a fiduciary duty to their clients under the Advisers Act.
Is my broker a fiduciary?
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Not necessarily. Broker-dealers making recommendations to retail customers are subject to Regulation Best Interest, which requires acting in the customer's best interest at the time of a recommendation. It is a different standard from an ongoing fiduciary duty.
How do I check?
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Look the firm up at adviserinfo.sec.gov and read the Form ADV Part 2, which states the services, fees and conflicts in plain language. Brokers appear in FINRA BrokerCheck. Both are free.
Can someone be both?
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Yes, and it is common. Dually registered individuals act as an adviser in some interactions and as a broker in others, with different obligations attaching to each. Asking which capacity applies to a specific recommendation is a fair question.
Does a fiduciary duty mean good advice?
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It means a legal obligation and a route to complain, not competence. A fiduciary can still be wrong, expensive or unsuitable for your situation, so the duty is a floor rather than a recommendation.
What is Form CRS?
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A short relationship summary that firms must give retail investors, stating whether they are a broker, an adviser or both, how they are paid, and what conflicts exist. It is two pages and worth reading before a first meeting.
Are robo-advisors fiduciaries?
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Where the operator is a registered investment adviser, yes, the fiduciary duty applies to the automated advice as it would to human advice. The Form ADV is still the document that states how the arrangement actually works.
Is an AI assistant a fiduciary?
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No. Software answering questions has no legal status and owes you nothing in this sense. That does not make it useless, and it does mean the accountability people assume is attached to advice is not present.
Why does the standard exist?
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Because advice is hard to evaluate before you receive it and expensive to evaluate afterwards. The duty shifts the burden from you detecting a conflict to the adviser disclosing or avoiding one, which is why the practical use of the word is a question rather than reassurance.