NAPFA Fiduciary Standard

For Registered-NAPFA Financial Planners, fiduciary responsibility is not aspirational; it is the standard.

As fiduciaries, NAPFA-Registered Financial Advisors commit to:

Being Fee-Only, not accepting commissions or conflicted compensation, and providing full written disclosure of all fees in advance to clients, including when and how the fees may change
Always placing their client’s interests first
Leading the client relationship with comprehensive financial planning, and referring clients to outside experts when the client’s needs fall outside the NAPFA Advisor’s professional field of expertise
Eliminating conflicts of interest whenever possible or disclosing them fully and fairly
Upholding rigorous standards of care and competence

I. Definition of a NAPFA Fiduciary

A NAPFA fiduciary is an individual or firm that occupies a position of special trust and confidence, the highest duty recognized in the profession. A NAPFA fiduciary must always act in the best interests of the client, without regard to the fiduciary’s financial interests, and must provide services solely in a Fee-only capacity.

The NAPFA Fiduciary Standard is grounded in established bodies of professional knowledge and practice*.

II. NAPFA Fiduciary Standards of Conduct

1. Duty of Care

A NAPFA fiduciary must follow a prudent and diligent process, applying professional skills and judgment in all aspects of client service.

Serve only in areas where they have the education, expertise, or relevant experience.
Act with the care, skill, prudence, and diligence that a professional of similar training would exercise under comparable circumstances.
Recognize and manage personal and professional biases that could influence advice.

2. Duty of Loyalty

A NAPFA fiduciary must act with honesty, integrity, and transparency, maintaining undivided loyalty to the client.
Place the client’s best interests ahead of their own at all times.
Avoid conflicts of interest whenever possible.
Fully and fairly disclose all material conflicts of interest in advance and in writing.
Act in good faith and with complete candor in all dealings with clients.

3. Duty of Competence

A NAPFA fiduciary must maintain and continually enhance professional competence.

Pursue ongoing professional development and continuing education annually.
Understand the scope and limits of one’s professional practice and expertise.
Seek additional training, supervision, or consultation when necessary. Or refer the client to an outside expert.
Consider how personal experience and behavioral biases may influence advice.

4. Duty of Compensation

A NAPFA fiduciary, and the firm through which they provide services, must ensure that all compensation is transparent, reasonable, and free from conflicts of interest.

Act in a Fee-only capacity
Do not accept commissions for the sale of any financial products, transactions, or revenue-sharing arrangements.
Disclose in writing all fees, the timing of payments, and the conditions under which fees may change.
Decline or terminate engagements where the fiduciary reasonably believes the cost of service exceeds the value delivered to the client.

5. Duty of Engagement

A NAPFA fiduciary must adhere to all terms, policies, and objectives established in the client engagement.

Comply with all lawful and reasonable directions of the client.
Act within the scope of agreed services with professional vigor.
When a client’s needs fall outside the fiduciary’s expertise, they refrain from providing services beyond their competence and refer the client to qualified professionals, or seek additional training, or consultation to ensure the client’s needs are met.

III. Commitment to Fiduciary Excellence

NAPFA members affirm their ongoing commitment to uphold this standard as the foundation of professional practice. Through this commitment, NAPFA sets the benchmark for Fee-only fiduciary excellence in financial planning and continues to advance the profession in service of the public.

*The NAPFA Fiduciary Oath is grounded in established bodies of professional knowledge and practice, including: (1) the fiduciary standard under the Investment Advisers Act of 1940 (“Advisers Act”) that governs the conduct of “registered investment advisers” (“RIAs”) who are regulated by federal and state securities authorities; (2) the fiduciary standard under the Employee Retirement Income Security Act of 1974 (“ERISA”) that provides federal oversight and standards for employer-sponsored retirement and benefit plans; and (3) the fiduciary standard under the Code of Ethics and Standards of Conduct (“CFP Standards”) developed and administered by the Certified Financial Planner Board of Standards, Inc. (“CFP Board”) which governs the conduct of Certified Financial Planner (“CFP®) professionals.