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

The difference between a broker-dealer and an investment adviser is an important distinction in Florida investment fraud law. A broker-dealer is a person or firm that buys and sells securities for their own account and on behalf of customers. They act as intermediaries between buyers and sellers, collecting a commission for the service. A broker-dealer must register with the Securities and Exchange Commission and the Financial Industry Regulatory Authority, and must conform to certain standards and regulations. An investment adviser, on the other hand, is a person or firm that offers advice and makes investment recommendations to their clients. They are generally hired to provide advice on the purchase and sale of securities and manage portfolios. Investment advisers must register with either the SEC or with their state regulatory body and are subject to stricter regulation than broker-dealers. Investment advisers must also meet certain standards of fiduciary responsibility to their clients. Overall, the primary difference between a broker-dealer and an investment adviser is that a broker-dealer buys and sells securities, while an investment adviser provides advice and makes investment recommendations. Both are subject to state and federal regulations, but investment advisers are held to a higher standard of responsibility than broker-dealers.

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

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