How to Choose between a Financial Advisor and a Stockbroker


You have worked hard for you money and you know you need to save it for the future, but you want your money to work for you as hard as it can and that may mean that you need to call in a professional.  There are differences in the type of professionals to use and who to actually bring in for your specific situation.

Brokers are people who have the abilities to buy and sell stock as well as other securities.  Stockbrokers have to become certified in order to sell stock.  Completion of the Series 7 exam or the Series 63 exam is necessary if they are to become certified.  There can be both hands-on, individual representation stockbrokers and discount stockbroker that mainly fill orders that the investor wishes to buy or sell. If a stockbroker claims to be certificated but is unable to buy and sell stock but is offering other services such as life insurance and annuities, this is actually an agent with an insurance company who is trying to work as an investment agent.  While these professionals have their place in terms of estate planning they are not the people to go to if you would like to invest in the stock market.

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The important subject with a stockbroker is that they are required by law to suggest products and investment options that are “suitable” for the person who is investing.  Should an action be deemed as not suitable or in the best interest of the stockbroker, rather than the investor, then this action is considered fraud.  In an instance of fraud it is in the investor’s best interest to know a good law firm that offers a stock fraud attorney.  The stock fraud attorney will determine if the investor has a case against the stockbroker.  Check out Thomas Law Group at to gain some valuable information about stock fraud attorneys.

Financial advisors are a higher service group; they work with the individual investors to achieve a financial goal.  The main distinction between the two groups is that a financial advisor is not required to be certified with any governing institution, but it is encouraged.  Within the financial advisor group there are two different classifications; one, fee-only advisors that do not sell any financial products such as insurance with their services, this provides a better environment where little conflicts of interest arise. Two, fee-based advisors, these advisors do sell financial products and the advisor earns a commission for the different types of financial products that they sell.  This type of environment is questionable because financial advisors are not required to disclose how they earn their commission and has the potential for conflicts of interest.

Determine what your personal needs and your investment needs are in order to choose the best professional for your portfolio.  Again, if you feel like your financial professional is working in his or her best interests rather than yours contact a stock fraud lawyer to determine if you have a case.

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