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Oct 1, 2008 12:00 PM
Who Are These People?
| 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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| GSTs | Family Offices |
| Private Foundations | Life Insurance |
| 2010 Tax Act News | Industry Trends Surveys |
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