How To Select A Financial Advisor: The Least You Should Know (Part 7 In eBook Series)

Chapter 5: Your Financial Advisor’s Business Model Matters

Despite the many job titles and professional designations that exist in the financial advisory profession today, there are three basic business models for financial advisors: a retail broker employed by a brokerage firm, an independent broker, or an independent investment advisor. Although you will find exceptional financial advisors working under each of these business models, the following discussion identifies the strengths and weaknesses of each business model from the client’s perspective. Let’s compare them.

The Retail Broker

The retail broker is employed by a brokerage firm and is otherwise known as a stockbroker or registered representative. Retail brokers offer brokerage accounts. As noted in Chapter 4, brokerage accounts provide no fiduciary legal obligation to act in your best interest.

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This month we travel to the southern state of Arkansas, the Natural State. It is known for its abundant parks and wilderness areas, with terrain encompassing mountains, caves, rivers and hot springs. The rugged Ozarks region in the northwest portion of the state has hiking trails and limestone caves, such as Blanchard Springs Caverns.

The state’s diverse geography varies from mountain ranges from the Ozark and the Ouachita Mountains, which make up the U.S. Interior Highlands, to the densely forested land in the south known as the Arkansas Timberlands, to the eastern lowlands along the Mississippi River and the Arkansas Delta. Read More