There are two standards that financial planners and advisors are held to: the fiduciary standard and the suitability standard. For example:
- Faced with two identical choices but with different fees, a fiduciary advisor would be compelled to recommend the option with lower total cost, even if it means lower revenues for the firm.
- Under suitability standard if an advisor has three suitable options he does not have to recommend the one that is better for a client, instead he can recommend the one that pays him the most as long as its suitable. They are not required to place clients interest first.