Duty of Loyalty
Certified Financial Planner glossary · Certified Financial Planner
Definition
The fiduciary obligation to place the client's interests ahead of the planner's or firm's interests.
Duty of Loyalty in plain English
The firm's grid pays more for Product A while Product B fits the client's goals and risk capacity better. Duty of Loyalty is the fiduciary obligation to place the client's interests ahead of the planner's or firm's interests. Attractive math that maximizes firm revenue still fails if loyalty is breached. On ranked ethics stems, loyalty conflicts sit above clever tax or return arguments, so discard the product-push choice even when its projected yield looks superior.
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