“Fiduciary” describes a standard of conduct, not a guarantee of any result. This guide explains how the SEC describes that standard, how advisors are commonly paid, and what Massachusetts households may want to ask before choosing one.
Advisor Selection Guide · Updated October 2026
A fiduciary financial advisor is an investment adviser that owes clients a duty of care and loyalty under federal law. The SEC describes this duty as acting in the client's best interest and addressing conflicts of interest. The title alone does not describe services or fees, so Massachusetts households may want to ask how any advisor is paid.
Key takeaways
In the SEC's interpretation of the Investment Advisers Act of 1940, an investment adviser is a fiduciary. That fiduciary duty has two parts, and the SEC describes them this way:
The duty applies according to the scope of the relationship the adviser and client agree to. It is a standard of conduct. It does not promise investment results, and it does not remove risk from investing.
Source: U.S. Securities and Exchange Commission, Commission Interpretation Regarding Standard of Conduct for Investment Advisers (Release IA-5248, effective July 12, 2019). Reviewed October 8, 2026.
Broker-dealers and investment advisers can offer different types of relationships, services, and compensation models. The SEC treats them under different standards of conduct. Historically, broker-dealer recommendations were generally governed by a suitability standard. The SEC's Regulation Best Interest, adopted June 5, 2019, now requires a broker-dealer to act in a retail customer's best interest at the time it makes a recommendation of a securities transaction or investment strategy, without placing its own interests ahead of the customer's. The SEC describes this as enhancing broker-dealer obligations beyond the earlier suitability requirements.
| Topic | Investment adviser | Broker-dealer |
|---|---|---|
| Standard of conduct | Fiduciary duty of care and loyalty under the Advisers Act. | Regulation Best Interest: disclosure, care, conflict-of-interest, and compliance obligations. |
| When it applies | Generally throughout the advisory relationship, according to its scope. | When a recommendation is made to a retail customer. It does not, by itself, require ongoing advice or monitoring. |
| Typical services | Often ongoing advice about a portfolio; may monitor or manage accounts. | Often transactional, such as executing orders and recommending investments. |
| Typical compensation | Often an ongoing fee based on assets; may instead or also be fixed, hourly, or other fees. | Often a commission or markup on a transaction. |
Neither model is automatically a better fit for every household. The right comparison is the total expected cost against the services you actually receive. Some firms and professionals can act in more than one capacity, so it may help to ask which role applies to each recommendation.
Sources: SEC, Regulation Best Interest compliance guide; staff bulletin on standards of conduct for broker-dealers and investment advisers; Chairman Clayton statement on Regulation Best Interest and the adviser fiduciary duty; and Investor.gov, Form CRS (relationship summary). Reviewed October 8, 2026. SEC staff bulletins are guidance, not rules.
“Fee-based” generally refers to compensation that comes from fees paid by the client. It is not a single regulatory category, and the term can be used differently across the industry, so it is reasonable to ask any advisor to explain exactly what it means in their practice. Investor.gov notes that investment professionals are commonly paid through transaction fees, such as commissions, or ongoing fees, such as a percentage of assets, and that other costs may apply.
Being a fiduciary does not mean an advisor has no conflicts. Examples of conflicts that can exist under different pay structures include:
When a fee is based on assets managed, an advisor may have an incentive to encourage keeping or adding assets in the account, which a client may want to weigh against other uses of the same money.
When compensation varies by product or account type, a professional may have an incentive to recommend one over another.
Referral arrangements, affiliated firms, or other payments may create incentives that a client may want to understand.
Under the duty of loyalty described above, an adviser must eliminate a conflict or fully and fairly disclose it, so the practical step is to read the disclosures. An adviser's Form ADV Part 2A describes its services, fees, and conflicts in more detail, and Form CRS provides a short summary. Neither a transaction-based nor an ongoing-fee structure is automatically lower in cost.
Source: Investor.gov, How Fees and Expenses Affect Your Investment Portfolio and Form CRS. Reviewed October 8, 2026.
These questions are educational starting points and apply to any advisor, including MSA Financial. Written answers may help you compare them.
For Massachusetts households with larger estates, the coordination questions can matter because estate documents, account titling, and tax decisions are handled by different professionals. The Massachusetts estate planning guide outlines how those pieces may connect. Legal and tax questions should go to your own attorney and CPA.
MSA Financial, LLC is an SEC-registered investment adviser (CRD #107768). The firm describes its approach as fiduciary and fee-based, with no products to sell or commissions at stake. Registration with the SEC does not imply a certain level of skill or training, and a fiduciary standard does not guarantee any outcome.
Michael Cammarata, CFP®, acts as a central point of contact between your investment portfolio, your estate attorney, and your CPA. He is not an attorney or CPA and does not draft legal documents, provide legal or tax advice, or prepare tax returns. See how that role works in practice in how a financial advisor fits into estate planning and the firm's tax-efficient wealth management service. For households weighing several planning areas together, see financial planning for high-net-worth individuals.
Like any advisory firm, MSA Financial has potential conflicts of interest. You can review the firm's Form ADV Part 2A and 2B and Form CRS for the firm's services, fees, and conflicts before deciding whether the relationship fits your circumstances.
This guide is for educational purposes only and does not constitute individualized legal, tax, or investment advice. Investment advisory services are offered through MSA Financial, LLC, a Registered Investment Adviser (CRD #107768). MSA Financial is an SEC-registered investment adviser. Registration with the SEC does not imply a certain level of skill or training. Investing involves risk, including the potential loss of principal. Michael Cammarata is not an attorney or CPA and does not provide legal or tax advice. He does not draft legal documents or prepare tax returns. He coordinates with clients' existing estate attorneys and CPAs. Tax treatment depends on individual circumstances, and legal and tax advice should be obtained from your own attorney and CPA. Regulatory descriptions reflect SEC materials reviewed October 8, 2026 and may change.