A helpful guide to various Financial Professionals (AKA: FP) offering financial services in the U.S.
This list is not exhaustive and doesn't cover all financial specializations within the field. Similar to physicians and lawyers, FP's can be generalists or specialists, and the choice of an FP depends on how they can assist in achieving specific goals and objectives based on your needs, wants and goals. This guide is to help you distinguish the difference.
Financial Planner:
- Provides comprehensive financial advice in areas such as investments, insurance, tax, retirement, and estate planning.
- Prepares written financial plans and is compensated through flat or hourly fees.
Financial Advisor/Consultant:
- Offers financial services based on clients' financial situations.
- Requires specific training and registration with a regulatory body.
- Compensation may come from ongoing portfolio management fees and/or commissions.
Stock Broker:
- Buys and sells stocks and other investments for clients, earning a commission, markup, or fee.
- Regulated as a broker or broker-dealer, may require relevant licenses or membership in a stock exchange.
Registered Investment Advisor (RIA):
- A firm registered with the SEC or state, providing investment advice and portfolio management.
- Held to a fiduciary standard and compensated through fees.
Insurance Broker:
- Intermediary selling, soliciting, or negotiating insurance on behalf of clients.
- May work for a single insurance carrier (captive agent) or represent multiple carriers (independent broker).
- Some may offer advanced financial services.
Robo Advisor:
- Provides online financial advice and investment management with minimal human intervention.
- Uses algorithms to create investment portfolios based on client preferences.
- Typically compensated through ongoing fees.
All FP's are subject to federal and/or state regulations. Securities-marketing FP's must obtain a FINRA license (researchable at https://brokercheck.finra.org).
Investment advisors also need SEC or state registration (researchable at https://adviserinfo.sec.gov). Insurance agents are regulated by individual states and must be licensed.
Additionally, FP's may hold professional designations related to their specialization, found at https://www.finra.org/investors/professional-designations.
This information and guide concludes with a personal introduction from Guy Middleton, AIF, BFA, RICP, RMA;
a Retirement Income Advisor and licensed Retirement Income Advisor, detailing his experience, licenses (FINRA Series 6, 7, 66, and state-specific), and professional designations. The advisor focuses on comprehensive financial services, particularly in retirement income planning, targeting clients within specific age and asset criteria. You can reach out to Guy Middleton, AIF, BFA, RICP, RMA here for a consultation or questions.
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