Investment Advice

Investment advice refers to a professional’s recommendations about investing in securities, either through a brokerage account or a managed fund. In order to give investment advice, professionals must adhere to certain policies and procedures designed to ensure they provide their clients with a high standard of care and that the advice they provide is in their client’s best interest. They also must follow rules designed to limit conflicts of interest and they must make basic information about their fees and services available to investors. More info https://www.theinvestorscentre.co.uk/

A fiduciary is someone who has a legal obligation to put the interests of his or her client ahead of his or her own interests. Investment advisers are fiduciaries, and they must comply with the fiduciary duty regulations of the Securities and Exchange Commission (SEC) or state securities regulators. Broker-dealers, on the other hand, are only required to meet a suitability standard when making recommendations to retail customers.

Investment Advice for Retirees: Building Financial Security

In addition to the requirements of being a fiduciary, investment advisers must disclose any material conflicts of interest that they have. They must also give investors the opportunity to waive the conflict of interest protections in place, such as by signing a written waiver agreement. Broker-dealers, on the otherhand, are not required to do this.

Investment advisers must also comply with certain disclosure and registration requirements. They must register with the SEC or state securities regulators and pass a competency examination. They must also provide their clients with a copy of FORM ADV Part 2, formerly known as a Financial Industry Regulatory Authority (FINRA) Form ADV, and any state-specific forms required by the states where they offer services.