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What is the difference between a Registered Investment Advisor and a broker?

April 26, 2017advisor broker Investment registered

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What is the difference between a Registered Investment Advisor and a broker?

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A Registered Investment Advisor firm is one that is required to uphold the standards of being a fiduciary. This is a relationship which requires the advisor to act in the best interest of the client. An RIA charges a fee for advice rendered to the client. A brokerage firm is a company that manufactures investment products and sells them to the investing public. A brokerage firm is held to the suitability standard. An investment must be suitable. Brokerage firms are not held to the fiduciary standard. Any advice given to the client is considered “incidental” to the buying or selling of securities.