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The National Association of Personal Financial Advisors (NAPFA) best describes the term as follows: “A fiduciary is a professional entrusted to manage assets or wealth while putting the client’s best interests first at all times. Financial advisors who adhere to a fiduciary standard must disclose any conflict or potential conflict to their clients before and during the advisory engagement.”

Commissioned advisers and brokers are not bound by the strict fiduciary duty parameters, and instead are held to a much looser standard, that of ‘suitability’. The suitability standard states that a commisioned adviser has to merely believe that the product they are selling is suitable for the client. For a good description of Suitability vs. Fiduciary Standards, click here .


A financial advisor is paid in one of three ways: by earning commissions on product sales, by earning client fees, or through a combination of the two.

Commissioned and fee-plus-commission advisors receive their compensation based on the specific financial products they sell to you. Because of the conflict of interest inherent in these transactions, these advisors may have difficulty putting the client’s interest above their own (see “fiduciary”).

On the other hand, a fee-only advisor’s sole compensation comes directly from clients, and as such, they are free to provide unbiased financial advice that is truly in the client’s best interests. Indeed, because they sell no products and receive no commissions, fee-only financial planners are directly motivated to help their clients succeed in aligning their finances with their goals.


You are most likely already familiar with the simplest form of robo-planning, the online Retirement Calculator, for example, this one from AARP

Many financial advisors use impersonal, limited robo-planning computer programs to set up your investment management account. These robo planners are not focused on creating the best-tailored financial plan for you as an individual; a robo-advisor’s primary aim is to gather assets.

Robo-planning focuses on your investments with pre-loaded algorythms and scripts that place you in ready-made asset management boxes. These tools are not able to focus on delivering customized client-centric advice or planning; everything from whether you should buy instead of rent to how to seriously prepare for the comfortable retirement you want.

For a good overview of robo-advisor technology from Investopedia, click here for an interesting article on the relative merits of robo advisors from Seeking Alpha, click here