May 8th, 2025 | 3:30 PM MST
Written By: Jenna Biancavilla | Senior Wealth Management Advisor with Pearl Capital Management
88% of financial advisors in the U.S. are tied to broker-dealers, insurance firms, or large banks that operate under a “suitability standard.” Translation? They can legally recommend products that pay them the highest commissions—as long as those products are suitable, not necessarily optimal, for you.
Only about 12% of advisors are true fiduciaries—legally required to put your best interests first, 100% of the time. No sales quotas. No commissions, ever. Just advice that puts your goals at the center of every decision.
Here are 5 powerful reasons why working with a fiduciary matters:
1. Fiduciaries Recommend What You Need, Not What Pays Them The Most
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- A non-fiduciary, fee-based advisor might push an annuity with a 7% commission—even if a simple low-cost ETF portfolio would perform better and offer more liquidity and flexibility. A fee-only fiduciary evaluates your risk tolerance, tax situation, and future needs to recommend what actually fits.
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2. No Hidden Conflicts of Interest
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- Many big banks compensate their advisors for steering clients toward proprietary funds, insurance products, or loan programs. Fiduciaries, by contrast, are often independent and open-platform—meaning they can shop the whole market for the best solutions and are not incentivized by presidents club trips for the top sales of a particular high-commissioned product.
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3. Fiduciaries Don’t Earn More by Churning Your Account
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- A commissioned broker might suggest frequent trades or product switches that generate more transaction fees and commissions. A fiduciary typically works on a flat percentage fee, meaning the primary incentive is to help your portfolio grow.
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4. Planning-First vs. Product-First
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- Most non-fiduciary advisors lead with a product—insurance, annuities, or mutual funds. Fiduciaries lead with a plan, integrating taxes, estate strategies, retirement goals, and risk into a cohesive long-term strategy.
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5. Legal Accountability
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- Fiduciaries are held to the highest legal standard under the Investment Advisers Act of 1940. If they breach that duty, they can be held legally liable. That’s a powerful layer of protection for clients who want transparency and trust.
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Before you trust someone with your life savings, ask this one question: “Are you a fiduciary—100% of the time?” If they hesitate, dodge, or say “I am fee-based, so, sometimes,” keep looking. Your future deserves better than a sales pitch.
If you have specific questions or need personalized guidance, Pearl Capital Management has a team of compassionate educators that will work with you to achieve financial peace of mind through personalized planning. Please send us an email at email@thepearlcapital.com or give our office a call at (602) 718-1177.
