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At some point you may turn to a financial professional for help with investing decisions, 

particularly if you’re trying to achieve different goals—such as retirement, children’s  

education, and buying a home. Before you can begin the search for someone you can  

trust, you need to identify the type of help you need. To do that, it pays to understand  

the distinction between two basic types of financial professionals—investment advisers  

and brokers.

investment Advisers

Investment advisers help you make investment decisions and manage your portfolio,  

and have a fiduciary duty, or legal requirement, to act in your best interest, not for their  

own personal gain. Investment advisers (IAs) may work as sole practitioners or, more  

commonly, at advisory firms that employ a number of advisers. (Investment advisory firms 

are also called registered investment advisers, or RIAs, and the advisers who work for them 

are known as investment adviser representatives, or IARs.) 

Unlike brokers, who earn a commission on trades they make on your behalf, investment 

advisers charge a fee for their services, sometimes based on a percentage of the money they 

manage, sometimes on an hourly basis, and sometimes on a retainer basis for a package  

of services.

In selecting an adviser, be sure to do your homework. Advisers must provide you with  

key information, such as their credentials, years and type of professional experience, the  

services they provide, how they are compensated, and any conflicts of interest that may  

apply. You should also ask about a prospective adviser’s work with other clients whose  

financial situation may be similar to your own.

Investment advisers are required to be registered with one of two regulatory authorities, 

depending on the size of their business:

•

  Investment advisers who manage less than $100 million in total assets—referred to  

as assets under management or AUM—must be registered with and inspected by the 

Texas State Securities Board.

•

  IAs with more than $100 million in assets under management must register with the  

U.S. Securities and Exchange Commission.

Finding A FinAnCiAL ProFEssionAL 

You CAn trust

PART 6

Before you can begin the search for someone you can trust, 

you need to identify the type of help you need.

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