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

Investment fraud law in California protects investors from being the victims of wrongdoings in the financial marketplace. In order to understand the law, it is important to understand the difference between a broker-dealer and an investment adviser. A broker-dealer is an individual or company who is licensed and regulated by the Securities and Exchange Commission (SEC) and state securities regulators. Broker-dealers are required to follow certain rules and regulations in order to conduct financial transactions on behalf of clients. This includes providing advice, conducting research, executing orders, and more. An investment adviser is a person or company that provides advice to investors with respect to securities and investments. Investment advisers are also subject to registration with the SEC and state securities regulators. Unlike broker-dealers, investment advisers are not required to execute orders in order to provide advice. Furthermore, investment advisers are held to a higher fiduciary standard which means they must always place their clients’ interests first. In summary, both broker-dealers and investment advisers are subject to regulation and are required to follow certain rules and regulations in order to provide advice and conduct financial transactions. However, the main difference is that broker-dealers are required to execute orders whereas investment advisers are held to a higher fiduciary standard.

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

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