As an investor, you are faced with hundreds of decisions on where to get your investment advice. Here’s a nice breakdown between advisors and brokers that can help steer your decision making process.

The infographic below refers to advisors using the acronym “RIAs” which stands for Registered Investment Advisors.

NorthStar Capital Advisors is an RIA.  Note that we require a minimum investment of only $50,000 so we win Round 4 below as well!  We hope this information will help you understand the role that we play in helping our clients.

(Click on the graphic to enlarge for easier reading)

The battle over your broker’s “fiduciary” role has moved in a new direction — away, some say, from a lot of clients’ best interests.

A major push by consumer advocates to hold stockbrokers to the same client-comes-first standard of care required of investment advisers — the so-called fiduciary standard — seemed close to success only a year ago.

The Securities and Exchange Commission had called for the new rules, despite brokers arguing that dispensing advice was only a part of their business model and they shouldn’t be held to the same standard as advisers in all situations.

Now, the SEC is saying it won’t write any new rules until it studies how much they might cost the industry.

Under current rules, brokers only need to ensure the products they sell their clients are “suitable,” and not necessarily the best possible or least expensive option. For example, a broker can sell a client a variable annuity that comes with a generous commission over a cheaper product, says Andrew Stoltmann, a Chicago-based securities lawyer who represents investors in arbitration and litigation. Advisers, on the other hand, are held to a fiduciary standard that requires them to recommend the less-pricey option, he says.

[Read the rest of this article at SmartMoney]

• Why is it so difficult to expect that people selling us investment products will put our interests first?
• Is the person who gives you advice on your portfolio and retirement account a “registered investment adviser” or a “broker-dealer”?
• Ask those giving you investment advice, sales pitches or specific retirement-plan suggestions if they are acting under a fiduciary standard of care.
• Insist that advisers offering specific investments inform you of any conflicts of interest related to their recommendations and disclose any commissions, referral fees or other compensation they would receive from selling you a financial product.
• Don’t be afraid to be impolite—always ask what an investment will cost, both in commissions and in built-in expenses such as fund expenses.

Read Karen Blumenthal’s article from the Wall Street Journal and be an informed investor:

Getting Going: Should You Trust Your Financial Adviser? http://online.wsj.comRegistered investment advisor or broker-dealer? The distinction is lost on most investors even though the two operate under very different standards.

North Carolina is the first state to reach a settlement with E*Trade over the misrepresentation of auction-rate securities as safe investments suitable for short-term cash management purposes.

The NC investigation found that E*Trade salesmen had not been properly trained by the company to sell the products and had failed to consistently disclose the risk that, if the auctions failed, clients would not be able to sell their auction rate securities and could be stuck with illiquid investments.

 

E*Trade to pay $25,000 settlement http://www.charlotteobserver.comE*Trade Securities will pay a $25,000 civil penalty under a settlement reached with the state over auction rate securities it sold to North Carolina investors.