What’s in a name? Here is a over-simplified description of the types of salespeople that advise clients on investing assets:
STOCKBROKER: Recommends stocks, bonds and other securities to clients and gets paid commissions on those the clients select.
INVESTMENT ADVISOR: Recommends investments usually in a non-discretionary arrangement with clients, and gets paid a fee for the recommendations accepted by clients. There are sub-sets of investment advisors:
RIA: A Registered Investment Advisor is registered at the State or Federal level.
INVESTMENT MANAGER: Manages client portfolios, making the buy and sell decisions with discretion, getting a fee based on assets under management.
INVESTMENT CONSULTANT: Usually an investment advisor that employs the 5-step consultative sale to recommend investment programs to clients.
IAR: An Investment Advisor Representative is usually a State-registered sales person or other employee if an investment advisor. States charge a fee to register as an IAR.
WEALTH MANAGER: An investment advisor that concentrates on individuals rather than institutions.
PENSION CONSULTANT: An investment advisor that specialized in employee benefit plans.
FINANCIAL PLANNER: An investment advisor that considers tax, estate, life insurance and similar issues to prepare a financial roadmap for clients.
BANKER / PRIVATE BANKER: Usually like wealth managers, but employed by banks.
INSURANCE AGENT: Many insurance agents are licensed to sell mutual funds, usually for IRA and 401(k) business.
CPA: Certified Public Accounts are increasingly getting more formally involved in the investment advice portion of the business.