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

The difference between a broker-dealer and a registered investment adviser lies in the services they provide. A broker-dealer is a company that engages in the buying and selling of securities for its customers and the firm itself. They are responsible for executing transactions and managing customer accounts. Broker-dealers must be registered with the Securities and Exchange Commission (SEC) and are regulated by state and federal securities laws. A registered investment adviser, on the other hand, provides more of an advisory role to their clients. An investment adviser is obligated to provide advice that is in their clients’ best interests by offering financial guidance concerning a variety of investment strategies and services. Advisers are also registered with the SEC and have a fiduciary duty to their clients. This means they must act with the highest level of care when managing investments. In West Virginia, both broker-dealers and investment advisers must register with the West Virginia State Board of Financial Institutions and are subject to regulations outlined by the West Virginia Division of Financial Institutions. Both are required to follow investment fraud laws which are in place to protect consumers from deceptive practices and fraud.

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

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