What is a Fiduciary?

There are two types of Financial Advisors offering services to the public. The majority are essentially Brokers who receive commissions for the sale of investment products. These individuals are held to a Suitability Rule by their regulators, meaning they should only sell you investments that are suitable or consistent with your financial goal. In contrast, a minority of Advisors actually function as true Investment Advisors. Investment Advisors are held to a higher Fiduciary Standard as defined by the Investment Advisors Act of 1940.

Analogous to a doctor’s Hippocratic Oath, the Fiduciary Standard holds the Investment Advisor to a much higher ethical standard:  the commitment to act only in your best interest.  To do so, the Investment Advisor must adhere to the duties of loyalty and care.

So, how does one know if their Financial Advisor is a Broker or an Investment Advisor?  The easy way is to ask about credentials.  If the Advisor has a CFP® certification, you are on the right track, for CFP® practitioners must adhere to the Certified Financial Planning Board’s Code of Ethics and Professional Responsibility.   This entails adherence to the highest principles and standards, which includes the Fiduciary Standard.

The following table summarizes the differences between Advisors who act as Brokers versus those who act as Investment Advisors:

Advisor Type

Regulatory Oversight

Standard Followed

Acts as a Fiduciary?

Revenue Received

Must put investor’s interests first?

Must Disclose Conflicts of Interest?

Investment Advisor

Individual States or SEC

Fiduciary Standard


Fees for service provided





Suitability Rule


Commissions from investment or brokerage firms




Click here to view a short cartoon on the Fiduciary Standard!

Investment Advisory Services, Financial Planning, and Wealth Management Services offered though Willamette Financial Advisors, LLC, an Registered Investment Advisor in the states of California, Idaho, Oregon, Tennessee, and Washington.
Securities also are offered through Centaurus Financial, Inc., member of FINRA and SIPC.
Willamette Financial Advisors, LLC and Centaurus Financial, Inc. are not affiliated. The adviser may not transact business in states where it is not appropriately registered or exempt from registration. Individualized responses to persons that involve either the effecting of transactions in securities or the rendering of personalized investment advice for compensation will not be made without registration or exemption.• 5335 SW Meadows Road, Suite 240, Lake Oswego, OR 97034 • (503) 747-0306.


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