The National Association of Personal Financial Advisors has formalized a new fiduciary standard that sharpens the distinction between truly conflict-free advice and the broader advisory industry. The standard, announced Monday, applies to all NAPFA-Registered Financial Advisors and is built on five core duties: care, loyalty, compensation, competence, and engagement.
Under the framework, registered advisors must act as fiduciaries at all times, not just during discrete transactions, and operate exclusively on a fee-only basis. This means no commissions, product sales, referral incentives, or any form of third-party compensation are permitted. “The word fiduciary is used often, but what it means in practice is not always clear,” said Kathryn Dattomo, NAPFA’s CEO, in a statement. “NAPFA-Registered Financial Advisors commit to putting clients first in every recommendation and relationship.”
The duty of compensation requires that all fees be transparent, reasonable, and free from conflicts. Advisors cannot accept commissions, enter revenue-sharing arrangements, or take referral fees. All fee structures, including potential changes, must be disclosed in writing before engagement begins. Additionally, advisors must hold the CFP® certification and complete 60 hours of continuing education every two years, double the current CFP Board baseline of 30 hours. Starting in 2027, the CFP Board will require 40 hours, but NAPFA’s standard remains higher.
The framework draws on three existing bodies of fiduciary law: the Investment Advisers Act of 1940, ERISA standards for retirement plans, and the CFP Board’s Code of Ethics. Natalie Pine, NAPFA Board Chair, said the standard “sets a higher standard by clearly defining a fee-only fiduciary model that is free from commissions, sales incentives, and conflicts.”
Industry data from the Investment Adviser Industry Snapshot 2026 report shows that asset-based fees remain dominant: 95.5% of SEC-registered investment advisors offered a fee based on a percentage of assets under management in 2025. However, only 17.5% relied solely on asset-based fees. The majority—78.0%—combined asset-based fees with fixed, hourly, or performance-based fees. The most common arrangement was asset-based plus fixed and/or hourly fees, used by 35.0% of advisors. Nearly 85% of advisors providing financial planning offered fixed or hourly fees.
Commissions have become a marginal feature of the RIA landscape. Just 1.9% of SEC-registered advisors offered commissions in 2025, down 10.1 percentage points since 2000. NAPFA’s standard goes further, requiring that advisors be compensated solely by the client, with no compensation tied to product sales or third-party revenue. This disqualifies hybrid RIA platforms and performance fees for most planning work.
The new standard also mandates periodic disclosure reviews to verify adherence to fee-only principles. “We are committed to transparent guidance and long-term financial well-being because putting our clients’ needs first is simply the right thing to do,” Pine said. The move comes as RIAs cite self-governance as key to fiduciary freedom, with Cerulli data showing RIAs hold 27% market share. Additionally, AdvicePay hit $1B in lifetime fees, signaling institutional traction for fee-for-service models.
