Who Are These People?

, Carolyn A. Chandler, associate editor, Trusts & Estates

Carolyn A. Chandler, associate editor, Trusts & Estates

	RIAs	Wirehouse Reps
Obligation to Clients	Fiduciary duty to act in clients' best interests at all times	Can put his firm's interests first, as long as his recommendation is “suitable” for the client
Compensation Model	Fee-based or asset-based	Fee-based or commission-based
Disclosure	Must tell clients of any and all fees received as compensation for their services	Disclosure rules are governed by a variety of sources, making them more abstruse. Depending on the broker/dealer, the client will typically learn about compensation through fee arrangements
Education	No SEC education requirements	Required to pass the Financial Industry Regulatory Authority (FINRA) qualification examination appropriate to the category of registration
Regulation	Advisors handling more than $25 million in client assets must register with the SEC.	SEC, FINRA and applicable states Those with less must register with their state's securities regulator
Governing Law	Investment Advisers Act of 1940	Securities Exchange Act of 1934

Advisors can be dually registered reps* — meaning they have taken the Series 7 examination and may make a commission on their sales and they have taken the Series 65 so they can be associated with an investment advisor and charge fees.

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