Your stockbroker is not a "fiduciary." What exactly does that mean? Stockbrokers don't always have your best financial interest at heart.

Don't get me wrong: I have friends (and family) who work on Wall Street. And many brokers do right by their clients, i.e. not pushing their firms' own fee-larded products on their investors.

They are good people, but they are not fiduciaries.

Before you sign on with a money manager, ask: Are you a fiduciary? If yes, great. If not, go in with your eyes open.

Fiduciaries, by law, have to do the right thing by their clients. No one on Wall Street wants, by law, to have to do the right thing.

Some street professionals are fiduciaries; registered investment advisers generally are, brokers are not.

And the distinction grows every day.

Anyone whose job is to raise sales cannot meet the fiduciary standard, notes Knut Rostad, president of the Institute for the Fiduciary Standard.

"Brokers may provide useful product recommendations, but they cannot meet the fiduciary standard," Rostad says.

"They can no more provide objective advice about investments than can the Ford car salesman objectively advise on cars. They may be terrific people but, by virtue of what they do, they will most assuredly provide terrible advice."

The issue is confusing, and Wall Street wants to keep it that way.

Plaintiffs' lawyers last week noted that nine U.S. brokerage firms - Merrill Lynch, Fidelity Investments, Ameriprise Financial, Wells Fargo, Morgan Stanley, Allstate Financial, UBS, Berthel Fisher, and Charles Schwab - "advertise in public as though they are trusted fiduciaries acting in the best interest of investors and then deny in nonpublic arbitration cases that they have any such duty to avoid conflicted advice."

The Public Investors Arbitration Bar Association report is available online at www.piaba.org.

"Investors believe they are doing business with individuals they can trust . . .. Yet when that trust is breached, these same firms disclaim liability when held to account in arbitration, and rely on case law to say no such duty exists," wrote co-author Christine Lazaro, director of the Securities Arbitration Clinic at St. John's University School of Law.

One example the report cited is Ameriprise Financial.

This firm advertised: "Once you've identified your dreams and goals, and you and the advisor have decided to work together, you can count on sound recommendations that address your goals. Our advisors are ethically obligated to act with your best interests at heart."

However, in a recent arbitration proceeding with a real investor, the firm stated: "Respondent owed no fiduciary duties to claimants and, even if it did, no such duties were breached."

earvedlund@phillynews.com

215-854-2808

@erinarvedlund