Know the difference between a financial advisor and a registered investment advisor

As per the survey performed by the Security and Exchange Commission, most individuals are not aware of the difference between a financial advisor and a registered investment advisor. There are different keys differences though, and it is important for anyone placing their trust and hard earned cash in the hands of one of these advisors to be aware.

The financial advisor  

Financial advisers belong to accounting & financial services have detailed knowledge in accounting, finance, and an understanding of the way the market works. Here are some responsibilities of the financial advisors:

  • Keeping up with the financial market
  • Instructing clients on investment opportunities
  • Assessing the risk in an investment
  • Helping clients scope with the loss of an investment

These advisors, wealth managers, investments analysts, and other similar titles are often paid by receiving commissions directly related to the financial products they suggest clients to buy.

The registered investment advisor 

A registered investment agent has many of the same job duties as a financial advisor. However, there is one key difference between the two- and this difference can mean wide potential clients who are finding help with their financial investments.

Fiduciary is big difference. Investment advisors are registered and governed under the investment Advisor Act of 1940. While some Finance and Accounting Companies may be simply working to push financial products to earn a commission, registered investment advisors are held to a much higher standard. When choosing between a financial consult, and registered advisor, the best way to do so is by asking for a free disclosure.