Notes

Brokers Vs Advisors - Why IS THERE No Movies About Investment Advisors?
ast week somebody asked me easily knew of any movies that featured investment advisors. After great deal of thought for a long time, I could not come up with any. Sure there are plenty of movies about brokers like Wall Street, Wolf of Wall Street, Boiler Room, Pursuit of Happyness or Trading Places. But I possibly could not think of one that depicted an investment advisor.

After having this realization, quickly I realized why this is the case. A movie about brokers is exciting and funny. I spent about 9 years working at broker dealers. While I never experienced the excesses that made those movies great, I understood the mentality of individuals who worked there. Brokers make money on commissions, so there is huge incentive to sell product to create money. Deferred Compensation in Florida can cause people to do stuff that they might not ordinarily do.

I cannot imagine what a movie about an investment advisor would look like or how they might even get more than 10 people in the seats. Until the advisor was a secret agent or alien from Mars. Then maybe you could get 30 people in the seats.

The end result is that being a wealth manager isn't exciting. Sure it may be an interesting, intellectually stimulating and fulfilling profession, it does not make for an excellent movie. The reason is that wealth management is about financial planning, investment management, risk management, and working with people. Before I go on I you should discuss the difference between being truly a broker and as an advisor.

Exactly what is a Broker or Registered Representative?

A Registered Representative is a one who works at a brokerage dealer who has passed the licensing requirements for the series 7 test. This title, registered representative, allows the person to market investment products and earn a commission for that sale. These investment products could be stocks, mutual funds, bonds, variable annuities, managed futures hedge funds and more.

The registered representative, or broker because they are also called, has to provide "suitable" investments to his clients. However they are not required to follow up with the client after the sale. Lots of the brokers provide other services with their clients as well, nonetheless it is not required by their license.

What's an Investment Advisor?

An Investment Advisor or Investment Advisor Representative is really a person who has passed the series 65 or 66 test and has met the requirements of hawaii or SEC regulators. This person may not earn commissions from investments. They may only earn a fee, paid directly from the clients. This is why they frequently are known as fee-only advisors.

Investment advisors do not receive compensation from anyone however the clients. Since there is no incentive to sell certain products, the advisory relationship with the client tends to be more holistic. This consists of investment management, financial planning, risk management or other related services. Because fee-only advisors do not get paid commissions on products they sell, frequently they charge for a financial plan.

Investment Advisors are also considered a fiduciary. This is usually a high standard of care that's needed is for each client. The standard of care carries through the entire relationship with your client from buying, holding and selling the investments. It is a significant difference between brokers and advisors.

Next time you are browsing the movie selection searching for movies linked to the financial field, think about the ones I have listed above. They are well-crafted movies about the industry with some poetic license and top actors to make things interesting. Whether the movie is about insider trading, drug fueled penny stock swindles, or how people go from the ground upwards to greatness, select the movie for what it is extremely than an insight into the world of investment advisors. If you need that, you may be searching for some time.
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