 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
Frequently Asked Questions What's the difference between a Stockbroker and a Registered Investment Adviser? A Stockbroker makes recommendations on whether to buy or sell securities held in a brokerage account. They are transaction-oriented professionals, placing trades on a solicitated or non-solicited basis. (Customer calls broker requesting to buy or sell a security). Stockbrokers cannot provide financial planning nor can they recommend stocks, bonds, or mutual funds to implement an asset allocation strategy. Nor are they permitted to manage fee based discretionary investment accounts. Independent Registered Investment Advisers are legally allowed to provide both fee based investment management and financial planning. A Registered Investment Adviser (RIA) is a fiduciary who provides investment advisory service and management. Stockbrokers do not have a fiduciary responsibility to their clients and therefore do not have to put the client’s interest first. The RIA is a fiduciary who must put a client's interest first and disclose any conflicts of interest.
A Brokerage business is sales oriented while an Investment Adviser is advisory in nature. The operations of a Brokerage firm also produce many conflicts of interest between brokerage firm and their customers. Here is an example of brokerage houses’ conflicts of interest: The success of a broker is determined by the number of commission based financial products sold. Marking up of municipal bonds held in the brokerage firm’s inventory and selling them to clients at 3 to 8% above their fair market price. The Wall Street Journal recently reported a major brokerage firm was fined by the SEC for a mark-up of 18%! Typically, brokerage houses have an investment banking arm whose job is to bring companies public. The broker may "push" these securities because their incentive is to sell product. The greatest advantage of working with an IA is the ongoing account management. Generally, a Stockbroker, Discount Broker, or No-load mutual fund group does not monitor, supervise, and make portfolio adjustments to your accounts on an ongoing discretionary basis. They are not responsible for the management of your accounts and are not paid to manage your accounts. Aspetuck Financial Management prefers to do one thing and one thing well, manage account assets. We do this successfully without the conflict of interest you may be exposed to at a brokerage firm. How do I explore working with Aspetuck? Its time to put a price tag on what you are doing. We offer a free service that reviews your current portfolio for ways to improve your portfolio's performance. Our IPM - Improving Portfolio Management Service makes recommendations that seek to reduce your cost of asset management, reduce overall portfolio risk, increase your portfolio's income, and enhance your portfolio's return opportunity set. You may email, fax, or mail us your latest investment statement and we will produce a portfolio analysis for you and your Aspeuck IA to review. If you like what you see and hear then you can take the next step and become a client. Put us to the test by transferring your account(s) that need skilled supervision and management: IRA, IRA Rollover, Roth IRA, SEP, SIMPLE IRA, PSP, DB Plan, 403b, 401k, Annuities, Individual Accounts, Trust Account(s), 529 College Savings Plan Account(s). Minimum investment is $50,000 in aggregate. It’s fast & easy to do! Don't tackle the challenges of retirement alone. Team-up with us to benefit from a long-term relationship with a trusted experienced Investment Advisor.
|
