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Mar 14, 2007 12:55 am

investment advisor
investment advisor rep
registered Rep

Etc....

I started my STC 66 tonight. It says it’s designed for someone with ZERO experience. I learn fast, I work full time, do part time sales, and I finished 25 credit hours this semester....

However, all of these definitions run together. I tried investopia.com and various google searches and nothing. Any help on where I can get a better understanding of these?

Thanks!

Mar 14, 2007 1:29 am

Ok, Chapter SIX better explains PART of it along with graphics. Seems a little late in the manual?<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

So the advisor who is a "agent" for the broker/dealer I used at The Financial Network is an Investment Advisor Rep. Where as The Financial Network is the Investment Advisor. So a broker/dealer "Agent" is the same thing as an investment advisor rep?

So an RIA is the same thing as an investment advisor?

Mar 14, 2007 1:40 am

I think I have it a little off?

Broker/dealer is a investment advisor(sometimes)
agent is under a broker/dealer

UBS is a investment advisor (that uses a broker/dealer)
IAR is under an IA

RIA is a IA
IAR is under an RIA

Mar 14, 2007 1:44 am

You forgot about the part that describes the interrelationships between
IAR’s, RIA’s, and IRA’s.

My god for a dyslexic this section would be an absolute trainwreck!

Mar 14, 2007 2:35 am

[quote=studio]

I think I have it a little off?

Broker/dealer is a investment advisor(sometimes)
agent is under a broker/dealer

UBS is a investment advisor (that uses a broker/dealer)
IAR is under an IA

RIA is a IA
IAR is under an RIA

[/quote]

You are making this way too hard on yourself.

An investment advisor is an entity that is in the business of giving advice about securities and is compensated for that advice.

An investment advisor's employees are called investment advisor representatives, and they are the people who actually provide portfolio management and other advisory services to clients.

An agent is an employee of a broker/dealer.  A broker/dealer is exempt from being classified as an Investment Advisor as long as its investment advice is solely incidental to its business and it receives no special compensation for its advice.


Mar 14, 2007 2:53 am

haha, I really am not an analytical person. I just have no experience and need to tie real life scenarios to what I am learning.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

So I am right then?
UBS or Joe Blow the Planner (RIA) is an entity that is an investment advisor.

Joe Jackson a financial planner at a local UBS branch is an investment advisor REP. Joe Jackson didn’t like UBS and moved to Joe Blows firm, he is still an IAR under the IA entity of Joe Blow.

[Quote=ManagedMoney]An investment advisor is an entity that is in the business of giving advice about securities and is compensated for that advice.

An investment advisor's employees are called investment advisor representatives, and they are the people who actually provide portfolio management and other advisory services to clients.

An agent is an employee of a broker/dealer.  A broker/dealer is exempt from being classified as an Investment Advisor as long as its investment advice is solely incidental to its business and it receives no special compensation for its advice.[/quote]


If this is what the book started off on..... This thread would not exist.

Mar 14, 2007 4:03 am

[quote=studio]

So I am right then?

[/quote]

No.  Not really.
Mar 14, 2007 12:19 pm

[quote=joedabrkr] [quote=studio]

So I am right then?

[/quote]

No.  Not really.
[/quote]

Thanks for the heads up, I will wait for someone with more time, knowledge and less posts to help me.

Mar 14, 2007 12:21 pm

So assuming the RIA is the same thing as an investment advisor entity is wrong? Other then that, looks like I just repeated what managed money said in an example.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Mar 14, 2007 1:26 pm

[quote=studio]

investment advisor
investment advisor rep
registered Rep

Etc....

[/quote]

I'm here...how can I help you?

Mar 14, 2007 2:06 pm

[quote=studio][quote=joedabrkr] [quote=studio]

So I am right then?

[/quote]

No.  Not really.
[/quote]

Thanks for the heads up, I will wait for someone with more time, knowledge and less posts to help me.

[/quote]

UBS is a large swiss bank that owns a U.S. Broker dealer.
They also own a corporate RIA.

An RIA is an entity that is compensated for investment advisory services, not comissions on transactions.  Many, but not ALL RIA's operate as (discretionary money managers).  Many, but not ALL, mutual fund management companies and money management firms are registered RIA's for example.  (I'm not entirely certain on that last one if anyone wants to correct me.

An RIA CAN be an individual, but more often it is a partnership or corporate entity.

An IAR is a PERSON who is compensated to represent the services of the RIA to the general public.  The IAR is distinguished by the fact that they(like the RIA) are not paid any commissions by product providers for transactions which occur, but rather a fee for investment counsel.  For many folks this fee is based on their share of a percentage of assets under management.  Some RIA's also get paid by time or by job for work which does not involve directly managing assets(think financial planning).

A B/D is a corporate entity which is paid for effecting transactions and (sometimes) for custodying assets.  (Having said that sometimes the b/d and the custodian are separate entities.)  A b/d also maintains and carries the licenses of its agents and  deals with regulatory requirements.  Neither b/d's nor their agents can be compensated for the advice they provide.  It is by and large incidental to the service of executing the transactions.  Agents(also known as registered reps) technically are Securities sales people, not financial advisors.

Many b/d's own a corporate RIA as part of their structure to facilitate services such as financial planning and discretionary investment management.  Many agents(me, for example) are "dually registered" as Registered Reps and also as IAR's to facilitate their being compensated for some of the more consultative services described at the beginning of this paragraph.

Hopefully this helps, and maybe some of my colleagues will add their own thoughts or corrections to any innacuracies I have stated.
Mar 14, 2007 2:32 pm

I greatly appreciate you bringing your knowledge and experience to the table Joe. Hopefully this will help guide me through the beginning.

I faced some of the same problems when I was doing real estate at 19. I never even closed on my OWN house let alone others! So some times I would need my hand held over some of the simplest problems. When I left the field at 23 I was successful and would consider myself more knowledgeable then 90% of the agents out there. Hopefully I can pull this off again.

I will review the posts tonight and jump back into the book. Once I understand what I'm studying the rest of the book doesn't look hard at all!

Mar 14, 2007 11:37 pm

IA investment adivsor (aka RIA)  have the IAR's = Fee for advice

B/D have the agents (aka registered rep) = commissioned

I'm sure I will learn it the more I go into the book, but I always thought to be a RIA/IAR you had to give up your 6/7 which then would losss the agent/RR status.

Well either way thanks for the help, it all makes sense now and matches the bits and peices in the manual.

Mar 15, 2007 12:09 am

Ahhhh, but sure you can under the US act!

Ok, Im done with this thread. Hopefully someone will find it helpfull when searching.