Key Takeaway: A breach of fiduciary duty occurs when a financial advisor who owes you the highest legal standard of loyalty puts their own financial interests ahead of yours — and it may entitle you to recover all resulting losses through FINRA arbitration or litigation.

Breach of Fiduciary Duty Attorney — When Your Advisor Betrays Your Trust

You trusted your financial advisor to act in your best interest. That’s what fiduciary duty means — the highest legal obligation one party can owe another. Your advisor was supposed to put you first, disclose every conflict, and recommend what was genuinely best for your financial future.

Instead, your advisor may have recommended products that generated the highest commissions, failed to disclose conflicts of interest, or made decisions that benefited them at your expense. When a fiduciary violates that trust, the law gives you powerful tools to recover your losses.

Haselkorn & Thibaut has over 50 years of experience holding financial advisors accountable for breaches of fiduciary duty. Our 98% success rate reflects our deep understanding of the fiduciary standard — and our ability to prove when it’s been violated.

Call 1-888-885-7162 for a free consultation, or contact us online to speak with a breach of fiduciary duty attorney.

What Is Fiduciary Duty?

Fiduciary duty is the highest legal obligation one party can owe another. It requires a financial advisor to act solely in the client’s best interest, prioritize the client’s financial welfare above their own, and disclose all material conflicts of interest.

Under fiduciary duty, your advisor must:

Put your interests first — always, without exception
Disclose all conflicts of interest — including commissions, referral fees, incentive bonuses, and any financial arrangement that could influence their recommendations
Provide advice that is in your best interest — not merely acceptable or suitable, but the best option available given your circumstances
Avoid self-dealing — they cannot profit at your expense
Seek best execution — they must strive for the most favorable terms reasonably available

The fiduciary standard comes from the Investment Advisers Act of 1940 and has been reinforced by SEC interpretations and court decisions for decades. It is not a gray area. A fiduciary who places their own financial interest ahead of a client’s has violated the law.

Fiduciary Duty vs. Suitability — The Critical Difference

Not all financial advisors are fiduciaries. The distinction matters enormously:

Fiduciary duty requires the advisor to act in your best interest — to recommend the optimal product or strategy for your situation, even if a less optimal product pays them more.

The suitability standard only requires a broker to recommend investments that are suitable — meaning they’re not completely inappropriate for your profile. A suitable investment may not be the best option. A broker following suitability rules can recommend a higher-commission product over a lower-cost alternative as long as the recommended product is technically “suitable.”

Regulation Best Interest (Reg BI), effective since June 2020, narrowed this gap by requiring brokers to act in the customer’s “best interest” at the time of a recommendation. But Reg BI is not a full fiduciary duty — it applies only at the point of recommendation, doesn’t require ongoing monitoring, and allows disclosed conflicts to persist.

For a detailed explanation of these standards, see our guide: Fiduciary Duty vs. Suitability: What Your Advisor Owes You →

Signs Your Financial Advisor May Have Breached Their Fiduciary Duty

Your advisor recommended high-commission products over lower-cost alternatives — If a fiduciary advisor recommended a product paying them 5–8% commissions when a similar, lower-cost product was available, that recommendation may constitute a breach of fiduciary duty.
Conflicts of interest were not disclosed — Your advisor had a financial incentive to recommend certain products — revenue sharing arrangements, incentive bonuses, or higher commission tiers — and failed to tell you about it.
Your advisor traded your account excessively — Churning in a fiduciary account is a double violation: it’s both unsuitable and a breach of the duty of loyalty. See Churning & Excessive Trading →
Your advisor placed you in proprietary products — Many firms create their own investment products (mutual funds, annuities, REITs) that generate additional revenue for the firm. Recommending these products over better-performing alternatives may breach fiduciary duty.
Your advisor failed to monitor your account — Fiduciary duty includes an ongoing obligation to monitor investments and adjust recommendations as your circumstances change. If your advisor set your portfolio and then ignored it for years while unsuitable positions accumulated losses, this may be a breach.
Revenue-sharing arrangements influenced recommendations — Some advisors receive payments from product sponsors, custodians, or broker-dealers for steering client assets into specific investments. If these payments influenced what was recommended to you, the duty of loyalty has been violated.

Call 1-888-885-7162 for a free consultation, or contact us online — we can determine whether your advisor owed you a fiduciary duty and whether that duty was breached.

How We Build Your Breach of Fiduciary Duty Case

Duty determination — First, we establish that your advisor owed you a fiduciary duty. This may be clear from the advisory agreement, the type of account, or the advisor’s registration as an investment adviser under the Investment Advisers Act. We review your contracts, Form ADV disclosures, and the regulatory status of your advisor.
Conflict of interest identification — We investigate your advisor’s compensation structure, commission arrangements, revenue-sharing deals, and incentive programs. FINRA discovery and SEC records often reveal conflicts that advisors failed to disclose to clients.
Breach documentation — We document the specific actions that constituted the breach — whether it’s recommending high-commission products, failing to disclose conflicts, or engaging in self-dealing. We compare what was recommended against what was available and objectively best for your situation.
Causation and damages — We establish that the breach caused your losses and calculate the damages. This includes the difference between what you lost and what you would have earned under a fiduciary-compliant strategy, plus any excess commissions or fees you paid.
Expert testimony — We engage securities industry experts who can testify about the fiduciary standard, the conflicts of interest in your case, and how a reasonable fiduciary would have advised you.

Common Scenarios Involving Breach of Fiduciary Duty

Fee-Based Accounts With Hidden Commissions

Some advisors charge an advisory fee (typically 1% of assets) and also earn commissions on product sales — a “double-dipping” arrangement that creates an inherent conflict. If your fee-based advisor earned commissions on products they recommended without disclosing this arrangement, the fiduciary duty may have been breached.

Dual-Registration

Many financial professionals are registered as both investment adviser representatives (fiduciaries) and broker-dealers (suitability standard). When a dually-registered advisor switches between these roles — wearing their “fiduciary hat” to gain your trust and their “broker hat” to earn commissions — the fiduciary duty may be violated. The SEC has flagged dual-registration as a significant source of investor confusion and potential misconduct.

Variable Annuity Sales by Fiduciary Advisors

When a fiduciary advisor recommends a variable annuity — a product with 5–8% commissions and 3–4% annual fees — over a lower-cost investment alternative, the conflict is stark. Fiduciary advisors have an obligation to recommend the product with the best risk-return profile for the client, not the product with the highest commission. See Variable Annuity Fraud →

Private Placement Recommendations

Private placements pay commissions of 5–12% and carry significant risks that may not be appropriate for many investors. A fiduciary who recommends private placements without fully disclosing the risks and conflicts may have breached their duty. See Private Placement Fraud →

What You Can Recover

Through FINRA arbitration or litigation, victims of fiduciary duty breaches may recover:

Compensatory damages — All losses caused by the breach, including the difference between your actual returns and what you would have earned under a fiduciary-compliant strategy
Disgorgement — The advisor may be required to give up any profits, commissions, or fees they earned through the breach
Rescission — The transaction may be unwound, with your original investment restored
Interest — Compensation for the time your money was improperly invested
Attorneys’ fees — Fiduciary duty claims may support fee-shifting in certain circumstances
Punitive damages — Breaches involving intentional self-dealing or deliberate concealment of conflicts may support punitive damage awards

Fiduciary duty claims are among the most powerful tools available to investors because the legal standard is so demanding. When an advisor violates fiduciary duty, the burden shifts heavily to the advisor to justify their conduct.

Why Choose Our Firm

Over 50 years of experience litigating fiduciary duty claims in the securities industry
98% success rate across all investment fraud cases
Free consultation — we evaluate your case at no cost
Contingency fee — you pay nothing unless we recover money for you
Nationwide representation — we handle cases in all 50 states
Former Wall Street defense lawyers — we understand the fiduciary standard from both sides
Deep experience with fiduciary duty claims — we know how to prove conflicts of interest and self-dealing that advisors work hard to conceal

Call 1-888-885-7162 for a free consultation, or contact us online — we can determine whether your advisor breached their fiduciary duty.

Related Practice Areas

FAQ

How do I know if my advisor is a fiduciary? Not all financial professionals are fiduciaries. Investment advisers registered under the Investment Advisers Act of 1940 generally owe fiduciary duties. Broker-dealers follow the suitability standard (enhanced by Reg BI). Many advisors are dually registered — meaning they may owe you a fiduciary duty in some contexts but not others. The best way to determine your advisor’s obligations is to check their Form ADV (for investment advisers) or CRD/BrokerCheck (for brokers), and to have an attorney review your advisory agreements.

Can a broker-dealer breach fiduciary duty? Traditional broker-dealers follow the suitability standard, not full fiduciary duty. However, Regulation Best Interest imposes a “best interest” obligation that, while not identical to fiduciary duty, creates similar legal exposure when a broker places their interests ahead of the customer’s. Additionally, state law may impose fiduciary duties in certain broker-dealer relationships. If your broker’s conduct involved intentional self-dealing or undisclosed conflicts, you may have claims under both Reg BI and common law fiduciary principles.

What’s the difference between unsuitability and breach of fiduciary duty? Unsuitability means the investment was inappropriate for your financial profile. Breach of fiduciary duty means the advisor put their own interests ahead of yours — a higher standard. An unsuitable recommendation may also be a fiduciary breach if the advisor was a fiduciary and the recommendation was driven by conflicts of interest. The two claims often overlap, and we typically pursue both when applicable.

Do I need to prove my advisor intended to harm me? No. Fiduciary duty is not about intent — it’s about loyalty. A fiduciary can breach their duty by failing to disclose a conflict of interest, even if they believed the investment was suitable. The duty of loyalty requires disclosure and avoidance of conflicts, not good intentions. If your advisor failed to put your interests first, the breach exists regardless of their subjective motivation.

What damages can I recover for breach of fiduciary duty? Damages may include compensatory losses (what you lost as a result of the breach), disgorgement of the advisor’s profits and commissions, rescission of the improper transactions, interest, and in egregious cases, punitive damages. The specific recovery depends on the facts of your case, the strength of the evidence, and the applicable legal standards.

How long do I have to file a fiduciary duty claim? Time limits vary. FINRA arbitration claims generally must be filed within 6 years of the events giving rise to the dispute, but state statutes of limitations for fiduciary duty claims may range from 2 to 6 years. Some states apply a “discovery rule” — the clock starts when you discovered or should have discovered the breach. Contact us promptly to protect your rights.

This page is for informational purposes only and does not constitute legal advice. Past results do not guarantee future outcomes.