Personal Finance & Estate › Fraud, scams & protecting family
Choosing a fiduciary advisor (fee-only, CFP, CPA, attorney)
· Concept or strategy
Standard practiceWhat most planners, CPAs and attorneys recommend.
How to pick professionals legally bound to put your interests first, and how to check how they are paid and credentialed.
See it on the Personal Finance & Estate map →How it works
Registered investment advisers owe a fiduciary duty for the whole relationship; brokers and insurance agents mostly earn commissions under looser 'best interest' or suitability rules. 'Fee-only' means paid only by the client: a percentage of assets (often about 1% a year), a flat fee or hourly. 'Fee-based' can still include commissions. CFP professionals must act as fiduciaries when advising. Ask in writing: are you a fiduciary at all times, and what will I pay in dollars? Then read Form CRS and Form ADV.
Why it matters for you
Who pays an advisor shapes what gets recommended; a written fiduciary commitment plus clear fees is the strongest structural protection for a family's savings.
Think of it like
Like a tenant rep paid by the landlord's commission: helpful, but the incentive points the other way. Fee-only advisors are paid only by the client.
Rules, limits and sources (2026)
The Investment Advisers Act of 1940 and SEC v. Capital Gains Research Bureau (1963) set adviser duties; firms file Form CRS and Form ADV with the SEC; CFP Board standards (2019); records appear on FINRA BrokerCheck.
Watch out for
Whether fee-only advice produces better results is debated; percentage-of-assets fees carry their own conflict, such as discouraging paying off debt or buying property.
Inside this (1)
Connections (5)
▸Fiduciary duty vs. suitability (Reg BI) is the key test in Choosing a fiduciary advisor (fee-only, CFP, CPA, attorney)Law or rule (2026)
How they connect
The legal standard is the first filter when choosing an advisor. A fiduciary at all times must put client interests first in all advice; a broker under Reg BI must do so only when making a recommendation. Asking which applies, and getting the answer in writing, quickly sorts candidates.
When it applies
At the first meeting with any advisor; since June 30, 2020, firms must hand retail clients Form CRS at or before the start of the relationship.
The rule
SEC rules require Form CRS to state plainly whether the firm is a broker, an adviser or both, how it is paid and what conflicts it has.
Watch out for
SEC-commissioned RAND research (2008) found many investors cannot tell brokers from advisers; whether Form CRS has fixed that is unclear.
▸Free-lunch seminars: trust mills & annuity churning are best countered by Choosing a fiduciary advisor (fee-only, CFP, CPA, attorney)Watch out
How they connect
The fix for seminar pressure is a second opinion from someone with nothing to sell. A fee-only fiduciary or estate attorney can review a proposed annuity, its surrender schedule and commission, and any trust documents before money moves. California's 30-day cancellation window for annuity buyers 60 and older gives time for that review.
When it applies
After the seminar, before signing or during the free-look period; family members often arrange the review when a parent mentions a new product.
How sure?
The SEC, FINRA and state regulators urge independent review of seminar pitches; California Insurance Code Sec. 10127.10 sets the 30-day senior free look.
Watch out for
Advisors paid on assets may be biased against annuities themselves, so even a fiduciary's second opinion deserves scrutiny.
▸Successor trustee & trustee duties often call for Choosing a fiduciary advisor (fee-only, CFP, CPA, attorney)Standard practice
How they connect
A successor trustee carries legal duties, such as prudent investing, notices, accountings and tax filings, usually without training. Hiring a trust attorney, a CPA for the final and trust tax returns, and possibly a fiduciary advisor, paid from the trust, helps meet them. Choose them by the same tests: fiduciary status and clear fees.
When it applies
At a parent's incapacity or death, when the successor trustee takes over; many families hire help in the first weeks, since trust notices are due within 60 days after a death.
How sure?
California Probate Code Sec. 16047 imposes the prudent investor rule and Sec. 16052 lets trustees delegate investing with care; the state licenses professional fiduciaries.
Watch out for
How much professional help is worth its cost depends on the estate; fees must be 'reasonable,' a standard heirs often dispute.
▸Investment fees (expense ratios, AUM fees, loads) are a key question in Choosing a fiduciary advisor (fee-only, CFP, CPA, attorney)Standard practice
How they connect
Fees are the clearest test of an advisor. Ask for every cost, including fund expenses, the advisory fee and any commissions, as a yearly dollar figure. A fiduciary should disclose these plainly; hesitation or vague answers are a red flag.
When it applies
At the first meeting and in each annual statement; SEC Form CRS (since 2020) and Form ADV Part 2A must disclose fees and conflicts.
How sure?
SEC rules require fee disclosure; SEC investor bulletins and Morningstar research show small fee gaps compounding into large differences over decades.
Watch out for
Whether a 1% advisory fee is worth it depends on the services, such as tax and estate planning or behavioral coaching; studies of advisor value disagree.
▸FINRA & BrokerCheck offer a free check when Choosing a fiduciary advisor (fee-only, CFP, CPA, attorney)Standard practice
How they connect
BrokerCheck shows a broker's or adviser's licenses, job history, customer complaints, arbitrations and disciplinary actions, free and in minutes. It is the basic background check before hiring anyone, like pulling a tenant's credit and court records before signing a lease.
When it applies
Online at brokercheck.finra.org, run by FINRA since 2007; it links to the SEC's database for registered investment advisers.
How sure?
A 2019 study by Egan, Matvos and Seru found about 7% of advisers had misconduct records, and many repeat offenders kept working, so checking pays.
Watch out for
Some complaints are expunged through arbitration, so a clean record is no guarantee; FINRA tightened its expungement rules in 2023.