Fiduciary Standard vs. Suitability Standard?

Advisor talking to a man and woman. Sandy Spring Trust.

What’s the Difference?

Quick Take

  • Investment advisers must meet a certain standard of conduct, either the fiduciary standard or the suitability standard. 
  • The fiduciary standard requires advisors to place a client's interests 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.
  • Simply put, the fiduciary standard rises to a higher level of duty and care which is one reason why Sandy Spring Trust advisers are proud to follow the fiduciary standard. 

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Deeper Dive

Fiduciary Standard

A fiduciary is an adviser who is required to act solely in the best interests 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 very best course of action that is in the client’s best interest, regardless of how it affects them personally or their firm.

Suitability Standard

Additionally, advisers operating 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.

Which is Better?

Working with a fiduciary adviser is usually the best 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. These duties can be described as a duty of loyalty, confidentiality, care and disclosure. 

Sandy Spring Trust advisors are fiduciaries. Our professional portfolio managers and trust officers are local, so they’re 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.

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Give us a call at 800.770.5417 or request an appointment.

  • Disclosure

    This material is provided solely for educational purposes by Sandy Spring Trust, and is not intended to constitute tax, legal or accounting advice, or a recommendation for any investment strategy or transaction.  You should consult your own legal, accounting, tax advisers, and/or portfolio manager regarding your specific situation and needs. Our staff will work closely with your advisers to coordinate your overall plan.  

    Wealth products are not FDIC Insured, not guaranteed, and may lose value.

    Sandy Spring Trust is a division of Sandy Spring Bank, Member FDIC. Sandy Spring Bank, Sandy Spring Trust, and the SSB logo, are registered trademarks of Sandy Spring Bank.