Categories of Investment Professionals

Stockbroker:

While commonly referred to as a stockbroker or just a broker the correct (legal) term for this individual is registered representative.  These individuals conduct transactions for commission.  For example, if you place a trade with a broker to sell 100 shares of IBM he or she will charge a commission.  The broker is being compensated for the transaction NOT the advice.  However, the broker is required to provide suitable recommendations concerning your account.

These individuals will be registered with the Financial Industry Regulatory Authority (FINRA) and will hold the Series 6 or Series 7 licenses.

 

Lastly, these individuals may also be Investment Advisor Representatives (see below) and/or insurance agents.

Investment Advisor Representative:

Often referred to as “Registered Investment Advisors” these individuals provide investment advice for a fee.  This fee may be based upon a percentage of assets they manage, a fixed fee or an hourly fee.

The firms these individuals are associated with will be either registered with the Securities and Exchange Commission or the States in which they conduct business.  The individuals may be registered in the State or not, depending upon circumstances.

 

In Vermont, these individuals will hold either the Series 65 examination or both the Series 7 and Series 66.  Please note that some professionals are granted waivers from the examination requirements due to their possession of certain professional designations.

 

It is important to know that most “financial planners” should be registered as Investment Advisors.  While no one regulates “financial planners” the investment advice rendered by most of these individuals requires registration as Investment Advisors.

 

These individuals are also commonly registered as brokers and insurance agents.