When you hired a financial advisor, you expected honesty, loyalty, and advice that put your interests first. Instead, you may have discovered hidden commissions, undisclosed conflicts, or recommendations that served your advisor more than your financial goals. A breach of fiduciary duty can cause serious losses, but investors who identify this misconduct often have options to recover.
Haselkorn & Thibaut, P.A., operating as Investment Fraud Lawyers, represents investors nationwide in breach of fiduciary duty claims. Our team includes former Wall Street defense attorneys, and we bring 95+ years of combined experience to every case. We have recovered $520 million for clients and maintain a 98% success rate. Call 1-888-885-7162 today for a free case review.
What is fiduciary duty?
A fiduciary duty is the highest legal obligation one party can owe another. When a financial advisor owes you this duty, the law requires the advisor to act solely in your best interest. The advisor must place your financial welfare first and disclose all material conflicts of interest.
This duty comes from the Investment Advisers Act of 1940, Securities and Exchange Commission (SEC) guidance on fiduciary duty, and decades of court decisions. A fiduciary advisor must put your interests first, disclose compensation arrangements that could influence advice, and avoid self-dealing. When an advisor violates these obligations, the breach may support a claim for damages.
Fiduciary duty, suitability, and Regulation Best Interest
Not every financial professional is a fiduciary. The standard that applies to your advisor determines the strength of your claim and the evidence we need to prove it.
Registered investment advisers generally owe a fiduciary duty under federal law. Broker-dealers historically followed a suitability standard. Regulation Best Interest, which took effect in June 2020, raised broker obligations but does not create full fiduciary duty.
| Standard | What it requires | When it applies |
|---|---|---|
| Fiduciary duty | Act in the client’s best interest, disclose conflicts, avoid self-dealing, and provide ongoing care. | Registered investment advisers and some state-law relationships. |
| Suitability | Recommend investments that are appropriate for the client’s profile. | Traditional broker-dealer recommendations before Reg BI. |
| Regulation Best Interest | Broker must act in the customer’s best interest at the time of a recommendation and disclose conflicts. | Broker-dealer recommendations on or after June 30, 2020. |
Warning signs of a fiduciary breach
Certain patterns suggest that an advisor placed personal or firm profits ahead of your interests. The table below lists common warning signs and what to review in your records. If you recognize one or more of these signs, consider speaking with an investment fraud attorney promptly.
| Warning sign | What to look for in your records |
|---|---|
| High-commission products recommended over lower-cost alternatives | Trade confirmations showing 5% to 8% commissions on annuities, REITs, or private placements. |
| Undisclosed conflicts of interest | Form ADV, revenue-sharing agreements, or incentive bonuses not explained to you. |
| Excessive trading in a fiduciary account | High turnover, repeated purchases and sales, or fees that seem disproportionate to account size. |
| Recommendations of firm proprietary products | Statements showing house-branded funds or products when better alternatives existed. |
| Failure to monitor the account | Long periods without contact, review, or rebalancing while unsuitable positions lost value. |
Common breach of fiduciary duty scenarios
Fiduciary breaches appear in several recurring situations. Fee-based accounts that also pay commissions to the advisor can create conflicts that must be disclosed.
Dually registered advisors who switch between fiduciary and broker roles may leave clients unclear about which standard applies. We also see claims involving variable annuity sales and private placement recommendations when a fiduciary failed to disclose risks or conflicts.
These issues often overlap with other forms of misconduct. For example, a fiduciary account with excessive trading may involve churning and excessive trading. A recommendation of an inappropriate product may also be an unsuitable investment.
What you may recover
Investors who prove a breach of fiduciary duty may seek several types of relief. The available remedies depend on the facts of the case, the losses caused, and the applicable law.
We evaluate each case individually and do not guarantee any specific outcome. The table below summarizes potential remedies, but recovery depends on the evidence and the law that governs your claim.
| Remedy | What it may cover |
|---|---|
| Compensatory damages | Losses caused by the breach. |
| Disgorgement | Profits, commissions, or fees the advisor earned. |
| Rescission | Unwinding improper transactions. |
| Interest | Compensation for the time your money was improperly invested. |
| Attorneys’ fees | In certain circumstances. |
| Punitive damages | When the breach involved intentional self-dealing or concealment. |
How our firm helps investors
We build fiduciary duty claims carefully. We review advisory agreements, compensation structures, and account records. Our team includes former Wall Street defense attorneys, and we bring 95+ years of combined experience to every case.
We have recovered $520 million for clients and maintain a 98% success rate. Our attorneys are recognized in the Top 2% of Super Lawyers. We handle cases nationwide and work on a contingency fee basis, so you pay no attorney fee unless we recover money for you.
You can learn more about our broader practice on our investment fraud attorney page or read our guide on how to recover investment losses.
Frequently asked questions
How do I know if my advisor owed me a fiduciary duty?
Investment advisers registered under the Investment Advisers Act of 1940 generally owe fiduciary duties. Broker-dealers traditionally follow the suitability standard, enhanced by Regulation Best Interest. Your advisory agreement and Form ADV disclosures are often the best starting points.
Can a broker-dealer breach fiduciary duty?
Traditional broker-dealers are held to the suitability or Regulation Best Interest standard, not full fiduciary duty. However, state law may impose fiduciary duties in certain relationships, and intentional self-dealing or undisclosed conflicts may create claims. We evaluate the specific facts of each relationship.
What is the difference between unsuitability and breach of fiduciary duty?
Unsuitability means an investment was inappropriate for your profile. Breach of fiduciary duty means the advisor put their own interests ahead of yours. The two claims often overlap, and we may pursue both when the facts support them.
Do I need to prove my advisor intended to harm me?
No. Fiduciary duty focuses on loyalty, not intent. The failure to put your interests first can be enough.
What damages might be available for breach of fiduciary duty?
Potential remedies include compensatory damages, disgorgement, rescission, interest, and in some cases attorneys’ fees or punitive damages. The specific recovery depends on the facts, the evidence, and the applicable legal standards.
How long do I have to bring a fiduciary duty claim?
Financial Industry Regulatory Authority (FINRA) arbitration claims generally must be filed within six years of the events giving rise to the dispute. State statutes of limitations may differ.
Some states use a discovery rule that starts the clock when you knew or should have known of the breach. Contact us promptly to protect your rights.
If you believe your advisor breached a fiduciary duty, call 1-888-885-7162 for a free case review. We represent investors nationwide and charge no attorney fee unless we recover money for you.
This page is for informational purposes only and does not constitute legal advice. Past results do not guarantee future outcomes.