Distinction between Registered Investment Advisor & Financial Advisor

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Most of us do not know the difference between financial services and the professional who provides those services. One such professional is a Financial Advisor and a Registered Investment Advisor (RIA). According to a survey conducted by an esteemed organization, most people are not aware that a financial advisor and an RIA are different, and have different responsibilities and functions. And, It is necessary to know for us, that to whom we should trust and hand over our hard-earned money for better planning and investment. In this, we will be discussing the difference between the Financial Advisor and an RIA in brief. For more details, visit https://sproutadvisers.com/

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D I S T I N C T I O N B E T W E E N R e g i s t e r e d I n v e s t m e n t A d v i s o r a n d F i n a n c i a l A d v i s o r - E x p l a i n e d

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C o n t e n t I n t r o d u c t i o n F i n a n c i a l A d v i s o r R e g i s t e r e d I n v e s t m e n t A d v i s o r D i f f e r e n c e b e t w e e n R I A a n d F i n a n c i a l A d v i s o r C o n c l u s i o n

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I n t r o d u c t i o n M o s t o f u s d o n o t k n o w t h e d i f f e r e n c e b e t w e e n f i n a n c i a l s e r v i c e s a n d t h e p r o f e s s i o n a l w h o p r o v i d e s t h o s e s e r v i c e s . O n e s u c h p r o f e s s i o n a l i s a F i n a n c i a l A d v i s o r a n d a R e g i s t e r e d I n v e s t m e n t A d v i s o r R I A .   "According to a survey conducted by an esteemed organization most people are not aware that a financial advisor and an RIA are different and have different responsibilities and functions." B u t I t i s n e c e s s a r y t o k n o w f o r u s t h a t t o w h o m w e s h o u l d t r u s t a n d h a n d o v e r o u r h a r d - e a r n e d m o n e y f o r b e t t e r p l a n n i n g a n d i n v e s t m e n t . I n t h e f o l l o w i n g a r t i c l e w e w i l l b e d i s c u s s i n g t h e d i f f e r e n c e b e t w e e n t h e F i n a n c i a l A d v i s o r a n d a n R I A i n b r i e f .

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F i n a n c i a l A d v i s o r A F i n a n c i a l A d v i s o r i s o n e w h o o f f e r s f i n a n c i a l p l a n n i n g s e r v i c e b y b u y i n g a n d s e l l i n g s e c u r i t i e s o n b e h a l f o f t h e i r c l i e n t . T h e y a l s o n e e d t o p o s s e s s a S e r i e s 6 5 l i c e n s e t o o f f e r t h e i r s e r v i c e t o t h e p u b l i c a n d c o n s t a n t e d u c a t i o n a b o u t t h e l a t e s t f i n a n c i a l p l a n n i n g p r a c t i c e a n d t a c t i c s . T h e y s e t u p r e t i r e m e n t p l a n s l i k e 4 0 1 k ’ s I R A ’ s e t c p e n s i o n p l a n s i n v e s t m e n t p l a n s e s t a t e p l a n n i n g a n d t a x p l a n n i n g . A n d t h e y r e f e r a n d a d v i c e o n s t o c k s b o n d s m u t u a l f u n d s a n d m a n y o t h e r i n v e s t m e n t m e t h o d s t o h e l p t o b u i l d a s t a b l e f i n a n c i a l b a s e .

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R e g i s t e r e d I n v e s t m e n t A d v i s o r R e g i s t e r e d I n v e s t m e n t A d v i s o r R I A i s a p r o f e s s i o n a l w h o o f f e r s c u s t o m i z e d f i n a n c i n g a d v i c e i n c l u d i n g p l a n n i n g f o r i t s c l i e n t s t o h e l p w i t h f i n a n c i a l l i f e .   T h e m a i n r o l e o f t h e R I A i s t o p r o v i d e a d v i c e o n t h e f i n a n c i a l f r o n t a n d m a n a g e t h e i r c l i e n t ’ s e n t i r e m o n e y a n d a s s e t s t o i n c r e a s e t h e w e a l t h w h i c h w i l l h e l p t h e m t o f o l l o w u p d r e a m s a n d g o a l s o f b o t h s h o r t a n d l o n g t e r m . T h e y w o r k w i t h c o m p l e x p o r t f o l i o s t o c r e a t e s i m p l e a n d e f f e c t i v e i n v e s t m e n t m a n a g e m e n t s t r a t e g i e s . T h e y s h o u l d b e r e g i s t e r e d w i t h t h e S e c u r i t i e s a n d E x c h a n g e C o m m i s s i o n o r S t a t e s e c u r i t i e s r e g u l a t o r s a n d s u b j e c t e d t o t h e I n v e s t m e n t A d v i s e r s A c t o f 1 9 4 0 . T h a t m e a n s t h e y s h o u l d o f f e r t h e i r d u t i e s w i t h t h e f i d u c i a r y .

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A l t h o u g h a n a d v i s o r a n d a n R I A h a v e t h e s a m e k i n d o f j o b s a n d d u t i e s t h e y h a v e o n e s i g n i f i c a n t d i f f e r e n c e t h a t m a k e s t h e m s e t a p a r t a n d a l s o m a k e s a d i f f e r e n c e i n t h e f i n a n c i a l p l a n n i n g o f o n e ’ s w h o a r e o f f e r i n g . A n d t h e d i f f e r e n c e i s “ F i d u c i a r y ” .

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R I A R I A w o r k s w i t h a f i d u c i a r y t h a t m e a n s t h e y h a v e t o a d v i s e a n d s u g g e s t f i n a n c i a l p r o d u c t s t h a t a r e t h e b e s t i n t e r e s t o f t h e c l i e n t r a t h e r t h a n t h e i r o w n .   F I N A N C I A L A D V I S O R A f i n a n c i a l a d v i s o r w i l l t r y t o s e l l t h e f i n a n c i a l p r o d u c t s w h i c h m a y o r m a y n o t b e t h e i n t e r e s t o f t h e c l i e n t t o m a k e m o n e y .   A s t h e y u s u a l l y t a k e t h e c o m p e n s a t i o n i n t h e f o r m o f a c o m m i s s i o n b a s e d o n t h e f i n a n c i a l p r o d u c t s t h e y a d v i s e d w h i c h m a y a r i s e c o n f l i c t s i n t h e f u t u r e . A n d t a k e t h e c o m p e n s a t i o n i n t h e f o r m o f a f l a t f e e o r a p e r c e n t a g e o n a s s e t s h e l d b y t h e c l i e n t .

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C o n c l u s i o n I n c o n c l u s i o n a f i n a n c i a l a d v i s o r o r a n R I A b o t h a r e p r o f e s s i o n a l s w h o h e l p p e o p l e w i t h f i n a n c i a l p l a n n i n g a n d a d v i c e . O n e s h o u l d b e v e r y c a r e f u l a n d a w a r e o f w h a t y o u n e e d a n d p u r s u e i n f i n a n c i a l f r o n t a n d w h o m t h e y n e e d f o r t h a t k i n d o f p u r s u i t .

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