A Financial Advisor’s Fiduciary Duty to Clients

Fiduciary Duty to Clients

Commencement Financial Planning LLC serves as a Fiduciary while more than 90% of other financial advisors are paid (in part or full) by commissions which provide an incentive to promote products and services to maximize their own income.

The Board of Directors, Representatives, and Financial Advisors comprising NAPFA have adopted the following definition of Fiduciary:


A financial advisor held to a Fiduciary Standard occupies a position of special trust and confidence when working with a client. As a Fiduciary, the financial advisor is required to act with undivided loyalty to the client. This includes disclosure of how the financial advisor is to be compensated and any corresponding conflicts of interest.

NAPFA believes advisors must receive compensation only from their clients, must disclose any possible conflicts of interest, and must be loyal to the best interests of their clients.


An advisor who is loyal to only his clients will not be swayed by outside forces to recommend investments with higher commissions or payouts. Unbiased advice for the management of your financial plan and investment assets (be they saved for retirement through the client’s hard work or received through inheritance) is crucial to optimizing the likelihood of your success.


NAPFA members are compensated solely by their clients and do not receive any outside inducements for recommending investment portfolio vehicles or other financial products. This is the true definition of being a “Fee-Only Advisor.”


An advisor should be diligent in his efforts to identify risks and potential solutions for clients. The advisor should communicate his observations, findings, and suggestions to clients in a timely and thorough manner to assist them in their decision-making process.


Clients must understand how their financial advisor is being compensated and whether or not any potential conflicts may impede an advisor’s ability to provide truly independent planning and wealth management advice. Disclosure must be made before a client works with an advisor or implements any of his advice.