There has been a lot of talk about financial fiduciaries recently and what it means to be one or work with one. So far, most of the talk has taken place within the financial planning and investment advisory professions.

The term "fiduciary," however, has not eased its way into Starbucks chit-chat or office gossip. If there were ever a time to make this f-word part of your lingo, it is now.

Those feeling a sense of outrage about the alleged crimes of Bernie Madoff or other Wall Street hustlers might wish to vent their anger, not just by claiming that these bad actors betrayed investors’ trust, but by stating that they violated their fiduciary responsibility. In the court proceedings and  government regulations inevitabily to come, it is likely that the term "fiduciary" will be invoked many, many times.

A fiduciary is someone who acts on behalf of or advises another individual, putting that individual's financial best interests ahead of his or her own.

In today’s environment, fiduciary standards for financial advisors have become more important than ever. But consumers also have a role to play in making fiduciary behavior an integral and visible component of the financial planning process. 

They need to become educated as to what they can and should expect from their Certified Financial Planner^® professional or other financial advisor. They should expect clear communication and explanation of the advice they receive, as well as full and fair disclosure of all material facts relating to the advisor’s services, the form and amount of compensation, and any conflicts of interest that might affect the basis of the advisor’s recommendations. 

Consumers should also know what questions to ask when interviewing a prospective advisor to determine whether the advisor considers himself a fiduciary; for a list of these questions, go to www.CFP.net.

Finally, the consumer should be aware that financial advisros with the CFP® designation are actually subject to enforcement actions, including revocation of their license in the event they are found to have violated not just these fiduciary standards, but other standards related to ethical and professional principles.

While the question of “what is a fiduciary?” has inspired intense and highly technical discussion among regulators, legislators, and financial service providers, financial advisors and consumers know that the answer is, in fact, pretty simple.