Final answer:
When a client pays a broker, it establishes a fiduciary relationship based on trust and loyalty. The broker has a duty to act in the client's best interests and avoid conflicts of interest.
Step-by-step explanation:
When a client pays or promises to pay a broker, it does establish a relationship between them. This relationship is known as a fiduciary relationship. A fiduciary relationship is a legal and ethical relationship that is based on trust, confidence, and loyalty.
When a client pays a broker, the broker has a duty to act in the client's best interests and to avoid any conflicts of interest. The broker must provide accurate and honest information, give suitable advice, and make decisions that are in the client's best interests.
For example, let's say a client pays a broker to invest their money. The broker has a fiduciary duty to make investment decisions that are in the client's best interests, taking into account their financial goals, risk tolerance, and other relevant factors.