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

The difference between a broker-dealer and an investment adviser is an important one to understand for individuals in North Carolina interested in making investments. A broker-dealer is a person or entity registered with the Securities and Exchange Commission (SEC) to buy and sell securities for their customers. Broker-dealers must also follow the requirements of the Financial Industry Regulatory Authority (FINRA). When a broker-dealer sells stocks, bonds, and other investments to customers, they receive commissions for their services. An investment adviser is a person or firm that provides investment advice to their clients. An investment adviser must register with the SEC or a state securities regulator. Investment advisers give their clients advice on selecting investments, managing their portfolios, and creating strategies for long-term financial goals. They do not receive commissions and only get paid a fee for their services. The main difference between a broker-dealer and an investment adviser is that a broker-dealer receives compensation for selling investments while an investment adviser only gets paid a fee for their advice. While both types of investments services may be useful, it is important to understand the differences between them to make sure you get the most out of your investments.

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

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