What's the difference?
Quick take
- Investment advisers must meet a certain standard of conduct, either the fiduciary or suitability standard.
- The fiduciary standard requires advisers to place the clients' interest ahead of their own.
- The suitability standard requires advisers to make investment recommendations that are suitable based on a client's age, financial goals and risk tolerance.
- The fiduciary standard rises to a high level of duty and care which is one reason why Atlantic Union Bank Wealth Relationship Managers follow the fiduciary standard.
Fiduciary standard
A fiduciary is an adviser who is required to act solely in the best interest of their client when offering financial advice. Fiduciary advisers are both legally and ethically bound to make recommendations and perform transactions that are appropriate for the client without any competing interest. They must follow the appropriate course of action that is in the client's best interest, regardless of how it affects them personally or their firm.
Suitability standard
Advisers who operate under the suitability standard and have control over a client's account must have a reasonable basis for making a series of transactions, such as stock trades. This includes determining what is appropriate based on their financial goals and risk profile. The adviser is not required to recommend what is best for the client as long as the recommendation is suitable.
Why it matters
Working with a fiduciary adviser is usually the better choice due to the legal and ethical standards applied to them. This includes making decisions free from competing interests, which can result in a higher quality of investment options. There are also no hidden fees or surprises — a fiduciary must always disclose fees and their origination.
Atlantic Union Bank Wealth Relationship Managers are fiduciaries. Our professional portfolio managers and trust officers are available to meet with you, as needed, whether you’re looking for a fiduciary investment adviser or someone to help manage an estate or trust.