The Fiduciary Standard

Investment advisers are bound to a fiduciary standard that was established as part of the Investment Advisers Act of 1940. They can be regulated by the SEC or state securities regulators, both of which hold advisers to a fiduciary standard that requires them to put their client's interests above their own. The act is pretty specific in defining what a fiduciary means, and it stipulates that an adviser must place his or her interests below that of the client. It consists of a duty of loyalty and care, and simply means that the adviser must act in the best interest of his or her client. For example, the adviser cannot buy securities for his or her account prior to buying them for a client, and is prohibited from making trades that may result in higher commissions for the adviser or his or her investment firm. It also means that the adviser must do his or her best to make sure investment advice is made using accurate and complete information, or basically, that the analysis is thorough and as accurate as possible. Avoiding conflicts of interest is important when acting as a fiduciary, and it means that an adviser must disclose any potential conflicts to placing the client's interests ahead of the adviser's. Additionally, the adviser needs to place trades under a "best execution" standard, meaning he or she must strive to trade securities with the best combination of low cost and efficient execution.
Source: Investopedia