Your Retirement Deserves the Best!
Before you decide to let someone advise you on how you should invest your money make sure you know what type of advisor they are. Do you want someone who has your best interests in mind?
Check out the various types of advisors below to make sure you know more about whom you are considering as your trusted advisor…
Financial Advisor Terms, Definitions and Descriptions:
Insurance Agent – An individual who sells insurance products for a commission that is licensed by the state or states in which they sell.
Solicitor – A licensed individual who connects clients and third party firms together for their mutual benefit, earning a fee or commission.
Stock Broker – An individual or a firm that is licensed to transact securities business based on earning a commission from what is commonly known as a Loads and Transaction fee.
Registered Representative – An individual who is technically employed by a Broker/Dealer and is also an affiliated representative; sharing loads, commissions and other fees. Registered Representatives are directly influenced by the directives of their Broker/Dealer when it comes to investment choices and strategies that can be offered to clients.
Investment Advisor Representative – An individual who is supervised by a Registered Investment Advisor as an affiliated advisor – sharing planning, management, and investment fees. Investment Advisor Representatives are directly influenced by the directives of their Registered Investment Advisory Firm when it comes to investment choices and strategies that can be offered to clients.
Registered Investment Advisor – An individual licensed by the SEC or the State Department of Securities to give investment advice or manage investments on a fee basis with full disclosure. They are licensed to function as a fiduciary, requiring them by law to act on the highest good for the benefit of the client with full disclosure.
Fee Based – An individual whose income is earned from fees which are fully disclosed to the client. This individual must hold a Series 65 Securities License or equivalent to charge financial planning or investment management fees. In addition, this person may offer certain securities and insurance products on a commission basis. However, disclosure between the client and the fee-based advisor is required.
Fee Only – An individual who offers no insurance or investment products that pay any form of commission. After designing a plan, they typically give the client a plan that is then implemented by someone earning additional fees or a commission.
Fiduciary – An individual licensed with the highest legal level of responsibility for the benefit of the client. This is also known as the Prudent Man rule; assisting clients in the same manner as the advisor would assist a close friend, family member or as the advisor would choose for their own benefit.
Captive Agent/Investment Advisor Representative/Registered Representative – An individual who is technically employed by an insurance company or a Broker/Dealer as an affiliated representative – sharing loads, commissions and other fees. Registered Representatives are directly influenced by the directives of their Broker/Dealer when it comes to investment choices and strategies that can be offered to clients.
Independent Agent/Registered Investment Advisor – An individual who is licensed and independent, able to represent any company that might be of benefit to their client. State law regulates insurance compensation paid to the agent. An Independent Registered Investment Advisor is an individual licensed by the SEC or the State Department of Securities to give investment advice or manage investments on a fee basis with full disclosure. When Registered Investment Advisors are independent, they may have a full range of investment services to offer their clients. They are licensed to function as a fiduciary, requiring them by law to act on the highest good for the benefit of the client with complete disclosure.
Dick Van Dyke Author, Retirement Educator, Financial Services Provider
