What is the difference between a bank or brokerages advisor and a Registered Investment Advisor?
Banks, brokerages, and insurance companies make up the bulk of the financial product industry. All offer very similar types of financial products. In order to get their highly competitive products into the consumer’s portfolio, they either hire sales people or pay a commission to an independent sales person who sells their product. The standard of care to which they are held is to “know the client and offer appropriate products”. The compensation is usually a commission for the sale although it is possible that the individual offering the product is paid a salary by the institution and may or may not recommend no-load products, or there is a dual licensing whereby the securities provider is paid a fee only or a commission and fee as is the case with many “wrap accounts”. They are also eligible to receive continued fees such as 12b-1 fees for mutual funds. A Registered Investment Advisor is licensed to provide advice and charge a fee for the value of their services. The fee can be any c
