If an investment advisor is acting as a fiduciary, what is their primary obligation?

When an investment advisor acts as a fiduciary, their primary obligation is to provide financial products that are in the client's best interest. This means that the advisor must prioritize the needs and goals of the client above their own interests and any potential commissions or incentives they may receive from selling certain products.

Fiduciary duty entails a high standard of care and loyalty, requiring the advisor to act with honesty and transparency. They must fully disclose any potential conflicts of interest and recommend solutions that align with the client's objectives, risk tolerance, and financial situation. This commitment ensures that clients receive unbiased advice that genuinely serves their financial well-being.

In contrast, options that focus on commission products, fee structures, or maximizing personal compensation do not align with the ethical and legal responsibilities of a fiduciary. These approaches prioritize the advisor's financial gain rather than the client's interests, which could lead to conflicts of interest and diminish the quality of advice provided.