Recently, more investors have been leaving many of the large brokerage firms and switching to work with an Independent Registered Investment Advisor (RIA). Do you know how an Independent Registered Investment Advisor differs from a financial advisor or stock broker? Most investors don’t realize or understand the credentials behind their investment advisors name. The unregulated “financial advisor” title is used by many who work in the financial services industry, so it is of great importance for investors to educate themselves and take the time to understand who is managing their money and how they are paid.
Many financial advisors offer investment advice and financial planning services . However, there are fundamental differences between a financial advisor and an Independent Registered Investment Advisor (RIA), such as 1650 Wealth Management. A stock broker is typically compensated by receiving commissions for selling financial products to their clients and is typically not held to a fiduciary standard. RIA’s or Registered Investment Advisor’s are held to a fiduciary standard. This is a legal obligation to make decisions that are in the best interest of their client. When investors work with a wealth manager or financial advisor that is held to a fiduciary standard, it provides them with peace of mind, of knowing that their investment advisor is free from corporate mandates and conflicts of interests.