Who's on my side? - Part 1 - Financial Advisors

Hands offering question mark or exclamation point

Do you need a financial advisor/broker/expert?
What is an advisor for?
What is an advisor obligated to do for you?Do you even need an advisor?

They usually share the disadvantage of charging you money,
Investing success is best gained by a simple approach that doesn’t require an expert.
Advisors’ goals may differ from yours (e.g. a car salesman wants to sell you a car for as much money as he can but you want to pay as little as you can).

If you’re terrified of handling your own investments, you can hire the job out.
If you’re confident making big trades frequently, an advisor can restrain you from such self destructive lunacy.

If you do want an advisor, it helps to know the difference between them. The biggest things to find out are:

Term	Legal Meaning?	Fiduciary Duty	Meaning
Financial Advisor Financial Analyst Investment Consultant	No	Possibly	Whatever they want it to mean
Financial Planner Financial Consultant	No	Maybe	Usually develop and possibly carry out comprehensive financial plans for customers long-term goals
Investment Advisers	Yes	Yes	SEC regulates those who manage $110 million or more in assets, otherwise regulated by state securities regulator
Certified Financial Planner	Yes	Yes + Code of Ethics	Adviser has a certain level of education and experience, as well as attends continuing education classes
Broker-Dealers and Registered Representatives	Kind of	Possibly	Primarily securities salesmen Don’t have to register as investment advisers, but some do, so find out exactly which services they will provide you and what they will charge

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