Financial Professional Terms: What They Mean and Why You Should Care

by William Reichenstein

Financial Professional Terms: What They Mean And Why You Should Care Splash image
Broker, registered investment advisor, financial planner, insurance agent, investment advisor, and wealth managers: These are a few of the common terms used to describe various financial professionals.

Many individual investors are confused by these terms, and do not have a clear understanding of what distinguishes one professional from another.

This article will clarify these terms and discuss differences in the duties owed by financial professionals to their clients.

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William Reichenstein , CFA, holds the Pat and Thomas R. Powers Chair in Investment Management at Baylor University. bill_reichenstein@baylor.edu.
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Brokers vs. Investment Advisors

In the world of financial advisors, there are two major regulatory environments; practitioners in these environments are brokers and investment advisors.

“Broker” is a legal term. Brokers are in the business of buying and selling securities at their clients’ direction. Another name for a broker is registered representative (or, registered rep). These individuals may work for broker-dealers such as Merrill Lynch, A.G. Edwards, Edward Jones, and UBS, or they may be associated with small local practices such as “Johnny Jones Investments.” If you walk into a commercial bank lobby, the investment professional you meet will likely be a broker. In addition, insurance agents who also offer investments are almost always brokers.

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William Reichenstein , CFA, holds the Pat and Thomas R. Powers Chair in Investment Management at Baylor University. bill_reichenstein@baylor.edu.


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enjoyed reading valuable information.

posted about 2 hours ago by N Krishne urs from New York

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