Question

How do you understand the difference between a fiduciary model and a transactional, consumerist model of business–customer relationship? What reasons exist for the fiduciary model? Is there an ethical difference between the two?

Answer 1

The simple intuitive difference that can be noted from both these models are :
In a transactional model, generation of revenue is the key wherein, there exists a commission involved for a business owner. Hence, the primary concern for the business will be to increase profits.
While in a fiduciary model, the business would not do anything that would mean to benefit itself rather than the customer, i.e. the business would always act in the best interests of a customer.

Reasons for the fiduciary model's existence :

• Ina business-customer relationship, a fiduciary model protects the customer's interests and saves him/her from incurring losses and increasing margins of profit
• Saves a lot of money for the customer on commissions and investments

Yes, there is a clear ethical difference between the two, where in a transactional model, the producer is prioritizing its profit margins even so at the cost of the consumer's best interests, whereas in a fiduciary model, the producer will be protecting the clients self-interests at all costs.