A Tale of Two Financial Perspectives:
A Broker vs. A Fiduciary Financial Planner
I was once referred to a man named Peter. Peter was looking for investment advice, so we arranged to meet for lunch in the Little Italy neighborhood of Chicago. During our conversation, I asked Peter a lot of questions to understand what he was looking for, what was important to him and his family, and what had motivated him to seek new advice. That lunch turned into a follow-up phone call that lasted nearly two hours. He was impressed we meet clients by phone and Zoom in the evenings (7:30pm) once or twice a week. What I learned about Peter—a man in his seventies—was both inspiring and insightful.
Peter’s primary concern was ensuring that his wife would be financially secure after his passing. He wanted to make sure she had enough income to enjoy her life and take care of herself. After securing his wife’s future, Peter’s next goal was to allocate a significant portion of his wealth to educational charities that were deeply meaningful to him. As he shared his concerns, values, and goals, I couldn’t help but feel a deep respect for his character. He was the kind of person who leaves you feeling inspired—a reminder that there are purpose-driven individuals out there making a difference.
Peter’s Financial Crossroads
After our discussions, I confirmed Peter’s interest in financial planning and outlined how we could create value for him. I shared ideas, courses of action, and concepts tailored to his needs, far exceeding the offerings of the large wirehouse he had been with for over 20 years. Peter was motivated for a change, but then he revealed something crucial: he didn’t actually want a guide or ongoing advice. He couldn’t wrap his head around paying an ongoing fee for proactive ongoing advice. He was anchored in his past experience.
Despite appreciating the value of a high-touch fiduciary relationship, Peter was more interested in “shopping.” He wanted to be pitched investment products and sold transactions. This perspective was interesting, and I challenged him on it. When I asked how much this was worth to him, he expressed confusion about why it couldn’t be done for less than $100 a trade. This sentiment underscored a broader misconception about the cost and value of financial advice.
The Broker Mentality vs. A Fiduciary Approach
Peter’s outlook reflects a mindset I encounter occasionally. Some individuals approach financial advisors expecting low-cost, transactional interactions rather than the transformational guidance fiduciaries provide. In such cases, my role often shifts from being a guide to an educator. It becomes my responsibility to help people understand what they want, how the advice marketplace works, and what realistic expectations for cost and value should be.
Peter’s belief in finding a broker willing to give great advice for $100 a trade stemmed from past experiences and outdated expectations. They where valid in the past, but not today. The truth is, brokers operating under that model haven’t been around in over 20 years. Today, no professional can sustain a business offering quality advice at that price. If someone does, it’s likely unlicensed or low-quality advice.
Do You Want a Transaction or a Transformation?
If you’re in the market for financial advice, it’s important to ask yourself: Do you want a transactional relationship or a transformational one?
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A transactional broker relationship focuses on product sales. Their loyalty is to the sale, not to you. Sales just need to be suitable at the time of sale. Going back to Peter’s portfolio, no one called him because they had no obligation to check in on him or his investments. The broker got paid a commission. With a broker Every conversation revolves around what they can sell next, without considering your holistic financial picture.
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A fiduciary financial planning and investment relationship is entirely different. It’s built on trust, empathy, and a commitment to your financial journey. At Sterling Edge Financial, we seek clients who value advice, who want a guide to navigate where they are today and where they aspire to be tomorrow. Our modest financial planning fee minimum reflects this philosophy—we’re not here to sell products but to create meaningful partnerships that help avoid costly mistakes and make informed decisions. We want to grow with you.
Avoiding Bad Decisions:
A Fiduciary’s Value
Sometimes, the greatest value a fiduciary provides isn’t in making good decisions but in helping clients avoid bad ones. Peter’s story is a reminder that prior experiences and expectations can impair our ability to adapt to new financial realities. Life and financial journeys evolve, and so must our decision-making.
Ultimately, the choice between a broker and a fiduciary comes down to what you value most: short-term sales or long-term guidance? If you’re ready for a relationship that prioritizes your goals and transforms your financial life, let’s start a conversation.
Kit Lancaster, CFP®, AWMA®
President
Disclosure:
The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.