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

The difference between a broker-dealer and an investment adviser comes down to the services they provide and who they provide them to. A broker-dealer is a firm that both buys and sells securities like stocks and bonds on behalf of clients. They can also provide advice on investments to their clients. An investment adviser is a person or firm who provides advice on investments to its clients. Investment advisers have a fiduciary duty to act in their client’s best interests. In West Virginia, all broker-dealers and investment advisers who provide services to residents must be registered with the state’s securities regulator. They must also be registered with the federal government’s Financial Industry Regulatory Authority if they are providing services to clients outside of West Virginia. Broker-dealers must follow the regulations laid out by the Securities Exchange Commission, while investment advisers must follow the regulations set down by the Investment Advisers Act of 1940. It’s important that investors understand the difference between a broker-dealer and an investment adviser, as they could potentially be liable for losses resulting from fraud or other illegal activities carried out by either type of professional. The West Virginia State Securities Commissioner has adopted the North American Securities Administrators Association’s Investor Protection Guide, which outlines the responsibilities of both broker-dealers and investment advisers. This guide is a great resource for both investors and professionals in the industry.

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

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