Most people assume their advisor is legally required to act in their best interest. Most of the time, that assumption is wrong.
It seems obvious. You are handing someone your life savings. Of course they are obligated to put you first.
Most of the time, that assumption is wrong.
"Are you a fiduciary?"
Registered Investment Advisors are held to the fiduciary standard. They are legally required to act in your best interest at all times, disclose conflicts, and avoid putting their compensation ahead of your outcome.
Brokers and wirehouse advisors are held to a different standard called suitability. A recommendation just has to be appropriate for your situation. Not optimal. Not in your best interest. Just not obviously wrong.
Under suitability, an advisor can recommend a fund that pays them a higher commission over a lower-cost fund that would serve you better, as long as both are technically suitable. Under fiduciary, that same recommendation is a violation.
Ask directly. "Are you a fiduciary?" A fiduciary answers yes without hesitation and puts it in writing. If you get hedging, or an answer that depends on the account type, that tells you something.
You can also look up any advisor on FINRA BrokerCheck or the SEC's Investment Adviser Public Disclosure database. RIAs are required to provide a Form ADV disclosing compensation, conflicts, and business practices. Ten minutes of reading tells you more than a two-hour sales meeting.
It is a question worth asking before you need to.
Not sure whether your current advisor is a fiduciary? I am happy to take a look at your situation, no commitment required.
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