Choosing the right financial advisor starts with understanding how they're compensated and who they're obligated to serve. Learn what the fiduciary standard means, and what to look for in an advisory relationship. 

How to Choose a Fiduciary Financial Advisor

Not all financial advisors are held to the same standard. Some are legally obligated to act in your best interest. Others operate under a lower standard that only requires their recommendations to be appropriate for your general circumstances — even if a better option is available.

A fiduciary financial advisor is bound by a legal and ethical obligation to prioritize your goals over their own. This guide covers what that standard means in practice, how to verify whether an advisor upholds it, and what else to evaluate when choosing an advisory relationship.

Key topics covered in this guide:

• What the fiduciary standard means
• How to verify whether an advisor is a fiduciary
• What credentials and fee structures to evaluate
• How to assess scope of services and relevant experience
• Questions to ask before selecting an advisor

What It Means to Be a Fiduciary

A fiduciary is a financial professional who is legally and ethically required to place the client's interests ahead of their own. This means recommending strategies and products that serve the client's goals, disclosing any potential conflicts of interest, and avoiding compensation arrangements that could compromise the objectivity of their advice.

The standard your advisor is held to depends on what type of firm they work for and how they are regulated:

• Registered Investment Advisors (RIAs) are held to a fiduciary duty under the Investment Advisers Act of 1940. This obligation is ongoing and applies to the entire advisory relationship.
• Broker-dealers operate under Regulation Best Interest (Reg BI), an SEC rule that requires them to act in a client's best interest at the time of a recommendation. However, Reg BI does not carry the same ongoing obligation as the fiduciary standard, and broker-dealers may still earn commissions on the products they recommend.
• Insurance agents and some other financial professionals may operate under a suitability standard. Under this standard, recommendations only need to be appropriate for the client's general financial situation. An advisor could recommend a higher-cost product over a lower-cost alternative, for example, as long as it fits the client's overall profile.

Some advisors are "dual-registered," meaning they are affiliated with both an RIA and a broker-dealer. These advisors may operate under a fiduciary standard in some contexts and shift to the Reg BI standard in others. This is why it is important to ask an advisor directly whether they serve as a fiduciary at all times.

How to Verify an Advisor's Fiduciary Status

The simplest way to determine whether an advisor is a fiduciary is to ask them directly: "Are you a fiduciary at all times?" The "at all times" distinction matters, because some dual-registered advisors act as fiduciaries when providing financial planning advice but operate under a different standard when recommending specific products.

If you'd like to verify an advisor's status independently, there are several public resources available:

SEC Investment Adviser Public Disclosure (IAPD) database. This searchable tool allows you to look up whether a firm or individual is registered as an investment adviser. You can access it at adviserinfo.sec.gov.

Form ADV. RIAs are required to file this disclosure document, which provides detailed information about the firm's services, fee structure, conflicts of interest, disciplinary history, and the types of clients they serve. Part 2 of Form ADV, sometimes called the "brochure," is written in plain language and designed to help prospective clients evaluate the firm. You can request a copy directly from the advisor or find it through the IAPD database.

FINRA BrokerCheck. This tool allows you to look up the background of financial professionals and firms, including registration status, employment history, certifications, and any reported complaints or regulatory actions. It's available at brokercheck.finra.org.

Steps for Choosing a Fiduciary Financial Advisor

Once you've confirmed that an advisor operates under the fiduciary standard, there are several additional factors worth evaluating. These steps can help you assess whether a particular advisor or firm is well-suited to your financial situation and goals.

1. Look for Relevant Credentials

Professional designations can offer insight into an advisor's training, areas of focus, and ethical obligations. Some of the credentials most commonly associated with fiduciary practice include:

• CFP® (Certified Financial Planner). CFP® professionals have completed rigorous coursework, passed a comprehensive exam covering financial planning topics, and are required to act as fiduciaries when providing financial planning advice. The CFP Board's code of ethics mandates that they place the client's interests first.
• CFA® (Chartered Financial Analyst). The CFA® charter is focused on investment analysis and portfolio management. CFA® charterholders are bound by a code of ethics that emphasizes client interests, though the designation is oriented more toward investment management than comprehensive financial planning.
• RIA registration. A Registered Investment Advisor is a firm (or individual) registered with the SEC or a state regulator that is legally held to the fiduciary standard when providing investment advice. RIA registration is a regulatory status rather than a credential, but it carries a specific legal obligation.

No single designation automatically makes someone a fiduciary in every context, but these credentials generally indicate a higher standard of training and accountability.

2. Evaluate How the Advisor is Compensated

How an advisor is paid can influence the advice they provide.

Fee-only advisors receive all of their compensation directly from clients. This may take the form of a percentage of assets under management (AUM), a flat fee, or an hourly rate. Because fee-only advisors do not earn commissions from selling products, their compensation structure is designed to reduce potential conflicts of interest.

Fee-based advisors may charge client fees but can also receive commissions or other compensation from third parties for recommending certain products. This hybrid model can introduce situations where the advisor has a financial incentive to recommend one product over another.

Make sure to ask an advisor directly whether any portion of their income comes from commissions or third-party compensation. If they do, that's important context for evaluating whether their recommendations are driven by your interests or by how they get paid.

3. Assess the Scope and Depth of Services

For individuals and families with complex financial lives, investment management may be one piece of a larger puzzle. Tax planning, retirement income strategy, estate planning, charitable giving, and business planning can all intersect in ways that affect your overall financial position.

Working with a firm that offers coordinated guidance across these areas may be valuable as your needs evolve. When evaluating a prospective advisor, it can be helpful to ask how they approach planning beyond portfolio management and whether they have in-house capabilities or established relationships with outside specialists like tax professionals and estate attorneys.

EP Wealth offers services spanning financial planning, investment management, tax planning, estate planning, retirement planning, and business planning — bringing these disciplines together under one roof.

4. Consider the Advisor's Experience with Clients Like You

For high-net-worth individuals and families, it can be helpful to work with an advisory firm that has experience with the kinds of complex planning considerations that tend to come with greater wealth. These might include:

• Managing concentrated stock positions
• Coordinating across multiple account types with different tax treatments
• Structuring charitable giving strategies
• Navigating equity compensation
• Planning for multi-generational wealth transfer

5. Ask the Right Questions Before You Commit

A prospective advisory relationship is worth evaluating carefully. Asking direct questions during the introductory process can help you understand what you're getting and whether the fit is right. Some questions to consider:

• Are you a fiduciary at all times, or only when providing certain types of advice?
• How are you compensated? Do you receive any commissions or third-party compensation?
• What types of clients do you typically work with, and what is your minimum account size?
• What services do you provide beyond investment management?
• How do you coordinate with my other professional advisors, such as my accountant or estate attorney?
• How often will we meet, and how do you communicate changes to my plan or strategy?
• Can you provide a copy of your Form ADV?

EP Wealth Advisors is a Fiduciary

EP Wealth Advisors is a registered investment advisor and operates as a fiduciary, meaning the firm is obligated to act in clients' best interests when providing financial advice. The guidance you receive is shaped by your goals and your financial situation — not by commissions or product-based incentives.

EP Wealth's Certified Financial Planners® bring together disciplines like investment management, tax planning, and retirement planning into a coordinated approach, so you don't have to manage those conversations separately.

To learn more about how EP Wealth approaches financial planning, contact an advisor at EP Wealth to start the conversation.

DISCLOSURES:

• Request an appointment with an EP Wealth Advisor when you have a minimum of $500,000 in investable assets – which includes qualified retirement plans (IRA, Roth IRA, 401(k), taxable brokerage, cash (savings / checking) and CDs. Investable assets do not include your home, vehicles, or collectibles.
• EP Wealth Advisors, LLC. is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered or is excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission, nor does it indicate that the advisor has attained a particular level of skill or ability.
• Hiring a qualified advisor and/or financial planner does not guarantee investment success and does not ensure that a client or prospective client will experience a higher level of performance or results. No guaranty or warranty is made so that any direct or implied results or projections being represented here will be met or sustained.
• The need for a financial advisor or financial planner and/or the type of services required are specific to the uniqueness of each individual’s circumstances. There is no guarantee or guarantee that the services offered by EP Wealth Advisors, LLC will satisfy your specific financial services requirements. Services offered by other advisors may align more to your specific needs.
• Information presented is general in nature and should not be viewed as a comprehensive analysis of the topics discussed. It is intended to serve as a tool containing general information that should assist you in the development of subsequent discussions. Content does not involve the rendering of personalized investment advice nor is it intended to supplement professional individualized advice.
• EP Wealth Advisors (“EPWA”) makes no representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information presented. All expressions of option are subject to change without notice.