Understanding the Fiduciary Standard

Customarily, two types of standards exist in financial services: the suitability standard and the fiduciary standard. The suitability standard focuses on whether an investment product or strategy is “suitable” for the investor based on factors such as, financial objectives and risk comfort level.

Under the suitability standard, an advisor determines whether a recommended product or strategy is suitable for the client. The fiduciary standard requires a higher level of responsibility for the advisor. Going beyond the suitability standard, the fiduciary standard requires that any advice about products and strategies be provided in the best interests of the investor.  This entails that Justin takes into consideration whether the fees are reasonable, whether there are conflicts of interest, and whether the investments are sufficiently diversified.