Registered Investment Advisor vs. Broker Dealer

There is a difference between a Registered Investment Advisor (RIA) and a Broker Dealer (BD).

YOU COME FIRST, NO MATTER WHAT.

Our “fiduciary” duty sets us apart from the rest. A fiduciary is someone that manages money for the benefit of another and is bound by law to place the interest of its beneficiary first and foremost. You would naturally think that anyone giving financial advice would be a fiduciary, but you’d be wrong. Brokers, registered representatives, and most people that call themselves financial advisors are not actually fiduciaries even though they are engaged in marketing themselves as financial advisors. In reality, only a small proportion of “financial advisors” are federally or state-Registered Investment Advisors and most financial advisors are actually considered “Broker-Dealers” by the Securities and Exchange Commission (SEC).

THE ADVICE YOU NEED.

A Registered Investment Advisor must follow the highest known standard in law, known as the “trust” standard, which means that an RIA is required by law to place the interests of its clients before its own and fulfill critical fiduciary duties in trust and confidence. In other words, the RIA must provide its “best advice”. On the contrary, a broker-dealer does not owe a fiduciary duty to its investment clients, but instead are required by federal law to act in the best interest of their employer instead. In comparison, RIA owes fiduciary duties to its investment clients only. This in turn means that superior service and stewardship can be found at an RIA, with no ulterior or underlying contradictory motives.
Broker Dealer RIA
Broker, Selling Products Advisor, Providing Guidance
Paid on Commission Fee Only
House Products/Mutual Funds Open Architecture
Sales Agent Fiduciary Advisor
Conflicted Aligned
Confusing Clear
Opaque Transparent
Traditional Brokerage Firm Registered Investment Advisory
Stigma of Wall Street Integrity of Boutique
Paper and Pen Going Green
Buy and Hold Dynamic Investing
Preferential Treatment Equality, Omnibus Trading

The video above produced by an RIA not affiliated with A Smarter Way to Invest truly exemplifies the difference between a Broker and any Registered Investment Advisor.