Washington State Department of Financial Institutions

Where to Turn for Help with Investments

What Types of Providers Offer Assistance With Investments?

Investment services providers fall into three categories:

Investment Advisers. The term investment adviser is a legal term that describes a broad range of people who are in the business of giving advice about securities (the term "securities" includes stocks, bonds, mutual funds, and annuities). They may use a variety of titles in addition to investment adviser, such as investment manager, investment counsel, asset manager, wealth manager, or portfolio manager. Investment advisers provide ongoing management of investments based on the client's objectives, typically with the client giving the adviser authority to make investment decisions without having to get prior approval from the client for each transaction (called discretionary authority).

Brokers. The terms broker and broker-dealer are legal terms that refer to people who are in the business of buying and selling securities (called trading) on behalf of customers. Individual salespeople employed by brokerage firms are often called stockbrokers and are officially referred to as registered representatives of the brokerage firm. But these individuals also use many other unofficial titles. These include financial consultant, financial adviser, and investment consultant. In recent years, brokerage firms have increasingly offered a broader range of investment planning services in addition to buying and selling securities.

Financial Planners. Unlike the terms investment adviser and broker, financial planner is not a legally defined term. However, it generally refers to providers who develop and may also implement comprehensive financial plans for customers based on their long-term goals. A comprehensive financial plan typically covers such topics as estate planning, tax planning, insurance needs, and debt management, in addition to more investment-oriented areas, such as retirement and college planning.

Source: The Coalition on Investor Education


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