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

The difference between a broker-dealer and an investment adviser lies in their business functions. A broker-dealer is a person or firm who buys and sells securities on behalf of customers and on their own. Broker-dealers execute transactions and provide their customers with services such as research and advice, trading advice, and portfolio management. Investment advisers, on the other hand, are professional finance experts who provide advice to clients about investments, financial products, and strategies. They provide a variety of services, from portfolio construction and monitoring to tax planning and financial planning. The primary legal difference between broker-dealers and investment advisers is that broker-dealers are primarily responsible for executing transactions, while investment advisers are responsible for giving advice. Because of this, broker-dealers are held to a higher standard of conduct, as it is their job to ensure that their clients are getting the best possible deal when it comes to trading securities. Investment advisers, in contrast, are primarily responsible for recommending investments that are in the best interests of their clients. In California, these differences are further enforced by Investment Fraud Law. Broker-dealers are required to meet registration and other regulatory requirements, while investment advisers must be registered with the state and comply with additional rules and regulations. Additionally, investment advisers must also adhere to state and federal laws related to disclosing conflicts of interest, as well as providing their clients with full disclosure about their services.

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

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