Comparison of Advisors
       Registered Investment Advisor  Broker / Financial Advisor
Legal Standard  Fiduciary Standard — acting in best interest of client and owe clients a duty of loyalty and care Suitability rule – product only has to be suitable not lowest cost or be in client’s best interest
Firm Ownership Independent and local Large multi-national parent
Custody of Assets Independent custodian Typically, parent company
Investment Offering Open architecture platform Open, but may have pressure to direct investment to in-house proprietary products
Process Consultative process providing advice   and recommendations A broker is a salesman who acts as an intermediary between a buyer and a seller
Investment Decisions Personal advice  based on financial plan and in best interest of client A broker typically relies on parent company for generic recommendations and portfolio allocations
Compensation Transparent,  advisory fee based Commissions, Loads, 12b-1 fee, Finder’s fee, Sales bonus, based on type of product and number of trades
Products Investment advice and best of class investment manager recommendations Many brokers sell their parent company’s investment products and receive extra compensation for sale