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

A broker-dealer and a registered investment adviser are two different types of professionals who provide services related to investments and securities. A broker-dealer is a company or individual who buys and sells securities such as stocks and bonds for the public. They are licensed by the Financial Industry Regulatory Authority (FINRA) and must follow their rules and regulations. They are also responsible for providing advice and making investment recommendations to clients. On the other hand, a registered investment adviser is a professional who provides advice and services related to investments, such as portfolio management, asset allocation, and security selection. They are usually registered with the Securities and Exchange Commission (SEC) or one of their state Securities Commission, and must comply with the Investment Advisers Act of 1940 and their state law. Unlike broker-dealers, they have a fiduciary duty to their clients, which means they are legally obligated to act in the best interests of their clients. In summary, the main difference between a broker-dealer and a registered investment adviser is that one is responsible for buying and selling securities, while the other is responsible for providing advice and services related to investments. While both of these professionals are regulated by the government, a registered investment adviser is held to a higher standard - the fiduciary duty.

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

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