What's the difference between a fiduciary and a broker?
Working with an advisor
A fiduciary is required to act in your best interest at all times. A broker may follow a less stringent standard depending on the role and product. The distinction matters most when products and recommendations are involved.
The standards
Registered Investment Advisers operate under a fiduciary duty. Broker-dealer representatives often operate under Regulation Best Interest, which is closer but not identical.
Why it matters
Compensation models can shape recommendations. Knowing how someone is paid is often as important as knowing the title on their card.
What to ask
Are you a fiduciary at all times? How are you compensated? Do you receive commissions or third-party payments?
What people often get wrong
- Assuming all advisors are held to the same standard
- Skipping the fiduciary question because the brand is well-known
- Confusing 'no commission' with 'no conflicts'
What to think about next
- Ask the fiduciary question in writing.
- Request an itemized fee disclosure.
- Cross-check via the SEC Investment Adviser Public Disclosure tool.
When to consider working with a CFP®
Working with a CFP® can help when these decisions feel intertwined, taxes, investments, cash flow, and life goals tend to move together, and a planning relationship can offer structure, prioritization, and accountability over time.
Frequently Asked Questions
Can someone be both?
Yes. Some professionals are dual-registered and switch hats depending on the product. Ask which hat is on for a given recommendation.
Talk to a CFP® who works with high earners.
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