What is the difference between a broker and an investment adviser?

//What is the difference between a broker and an investment adviser?

What is the difference between a broker and an investment adviser?

Brokers and investment advisors are both in the service industry with both their clients being investors. These investors rarely know the difference between these two service providers, even though the differences may help them choose the most suitable option for their needs. Read about the differences between brokers and investment advisors below:

Investment advisers
Investment advisers have a duty to put their client’s best interests first and exercise loyalty and care with full disclosure of facts. They advise their clients on the most beneficial investments in stocks, bonds or funds. Some investment advisers manage and shape their client’s investment portfolios. This sometimes includes client assistance with tax, estate and mortgage planning. Although these are financial tasks, investment advisers should not be mistaken for financial advisors. These advisers pertain to a higher legal standard than brokers and undergo different training and licensing which involves passing the series 65 exam.

Brokers
In the past, a broker’s service was reserved for the rich. Investment advisers worked through brokers and the brokers would charge very high commissions. Nowadays, investors do not require brokers to buy and sell on the market. Brokers have broadened their services to include investment management which affords them reasoning for high commissions. Brokers tend to work with their corporate finance department to raise company capital by selling insurance or private deals to their clients. Brokers sell to their clients for the benefit of the company while advisers sell to clients to benefit the clien

By | 2019-10-10T13:32:13+00:00 October 10th, 2019|Blog|0 Comments

About the Author:

Leave A Comment