My great-grandmother’s “advisor” lost her fortune.

Turns out he wasn’t an advisor at all.

He was a broker.

He got paid every time he placed a trade in her account. Over a few short years, he managed to trade her entire portfolio into his own pocket.

The family money was gone.

This story may sound extreme, but the underlying structure still exists today.

Let me break it down.

Brokers

• Are primarily salespeople
• Often get paid commissions by product providers
• Represent issuers, not clients
• Operate under a vague “best interest” standard
• Commonly work for large banks and wirehouses

Advisors (fiduciaries)

• Are paid a transparent fee by you, the client
• Provide personalized investment advice
• Are legally obligated to act in your best interest
• Exist to advise—not sell
• Often emphasize holistic financial planning

If you’re not sure how your current advisor is compensated, ask them one simple question:

“Are you a fiduciary at all times—and how are you paid?”

The answer might surprise you.