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

In Virginia, the difference between a broker-dealer and an investment adviser is in the way they provide services. A broker-dealer is a financial professional who facilitates the buying and selling of securities such as stocks, bonds, and other financial instruments. These firms are usually associated with major Wall Street banks and provide services such as executing trades, maintaining records, and providing advice on securities transactions. On the other hand, investment advisers are professionals who provide advice and customized investment strategies to their clients. They do not actually execute trades like a broker-dealer, but instead look at their clients’ individual goals, financial situations, and risk tolerances and make investment recommendations accordingly. The difference between the two is important to keep in mind, as broker-dealers are subject to regulations by the Securities and Exchange Commission, while investment advisers are subject to state laws and regulations overseen by the Virginia State Corporation Commission. In addition, investment advisers must obtain a license from the state in order to provide services to clients in Virginia.

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

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