What's The Difference Between An Investment Advisor and Financial Advisor and Stockbroker and...

What’s The Difference Between An Investment Advisor and Financial Advisor and Stockbroker and…

There is an updated version of this post that can be found here: Investment Advisor vs Financial Advisor

 

Investment Advisor vs Financial Advisor

I get asked all the time “what is the difference between your firm and my current broker?”. Honestly, it’s confusing. People who work in the financial services industry have a tendency to get lumped together into one big group, even though we all do very different jobs.

TD Ameritrade put together a great presentation that points out the various differences. In addition they include results from their investor survey showing what choices investors would make once they understood the difference.

Couple of key points:

Investment Advisors
-fiduciary duty
-innovation comes from this area (hedge funds, spoke funds, etc)
-no products to sell – money managers
-typically investment model based
-typically small business owner, privately owned
-has access to multiple firms (Fidelity, Schwab, FolioFN, TD Ameritrade, etc)

vs Financial Advisors, Stockbrokers, etc
-no fiduciary duty
-spend time selling
-firm products to sell
-quotas and sales contest
-MPT based
-work for large firm (Bank of America Merrill Lynch, Morgan Stanley Smith Barney, etc)
-access to only firm’s resources

Here is a link to the PDF and below is the presentation via Scribd (which doesn’t work well with all smartphones, iPads, etc)
TD Ameritrade: The Benefits of Working With A RIA

TD Ameritrade: The Benefits of Working With A RIA

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