Brokers and Investment Advisers – Which is Right For Me

Brokers and Investment Advisers – Which is Right For Me


How do I know if a broker or an advisor
is right for me? That’s a common question I hear and one of the hardest to answer
particularly without knowing more about your specific situation. It really comes
down to what you are looking for. For example, how often you plan to buy and
sell securities, how involved you want to be in the decision to buy and sell,
whether you want someone to manage and monitor your portfolio on an ongoing
basis, and whether the costs line up with the services you need or want. Let me give
you a couple of basic questions to think about. Do you want someone managing your
account on an ongoing basis based on your broad financial goals and needs and
movements in the markets? If so, an investment advisor may be best for you.
Or, do you plan to buy a few stocks, bonds, mutual funds, or ETFs and hold them for
the long term with a few adjustments over the years? In that case, a broker may
be best for you. These are just a few of the questions
you should ask yourself and anyone you are thinking about hiring. It’s important
to remember that brokers and investment advisors have financial incentives to
recommend that you open an account with them, just like when they recommend that
you buy, sell, or hold securities. Our rules recognize that this conflict
exists and clearly prohibit both brokers and investment advisors from putting
their interests ahead of your interests when they recommend that you open an
account with a broker or investment advisor.

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