Who is your Financial Advisor?

By Greer Gibson Bacon, CFP®


Today, everyone calls himself a financial advisor.  But, like many things in life, they come in different flavors.  One isn’t better than another.  They’re just different and here’s how.

Registered Representatives (RRs)

RRs work for brokerage firms, buying and selling securities for client accounts.  They hold Series 6 or 7 sales licenses and earn commissions when they buy or sell securities for you. 

RRs are subject to a suitability standard of care.  Their recommendations must be suitable based on your financial goals and circumstance.  They may not misrepresent investments, but aren’t required to fully disclose or avoid conflicts of interest.  Once a transaction is made, RRs have no duty to monitor the recommendation to assure it remains suitable for you.  So, it’s up to you. 

An RR may be a great choice if you have the time, inclination and experience to do-it-yourself or discern that recommendations made to you are and remain suitable.  You can check-out an RR’s licensing and disciplinary history by visiting finra.org/brokercheck

Investment Advisor Representatives (IARs)

IARs work for registered investment advisory firms, providing advice and managing client portfolios.  They hold Series 65 advisory licenses and earn ongoing fees based on how much money they manage for you.  They are “fee-only”.

IARs are subject to a fiduciary standard and must comply with the Uniform Prudent Investor Act.  They must know your financial goals and circumstance, and manage accordingly.  They must put your best interest ahead of their own, fully disclosing and avoiding potential and actual conflicts of interest.  They must monitor your investments to assure they remain prudent.

If you don’t have the time, inclination or experience to manage your investments, an IAR may be a great choice.  In the long run, professional management costs far less than mistakes made by distracted or novice investors. 

You can check-out an IAR’s licensing, professional designations and disciplinary history by visiting advisorinfo.sec.gov.  While you’re there, be sure to check-out the firm’s Form ADV Part 2 (disclosure brochure).  It tells you everything you should know about a firm and its IARs. 

Dual Registration

Today, many financial advisors are licensed as both RR and IAR and may act in either capacity.  Since this can lead to misunderstanding, it’s important to be clear about your expectations for a relationship and understand in which capacity the financial advisor will act.  Don’t assume.  Dual registrants often describe themselves as “fee-based”.

Which financial advisor is right for you? 

Your financial advisor should be the best fit for you, not your friend or relative.  Ask yourself if you have the time, inclination and experience to manage your investments.  Experience can be acquired, time and inclination cannot.  If you honestly assess your needs and do your due diligence, you’re likely to come up with the best fit for you.

What do the initials behind your name mean? 

Visit the FINRA Professional Designations database to learn the education, examination, experience and ethics requirements for most financial industry designations.  The website is finra.org/investors/professional-designations.


This article first appeared in the August 2016 Spokane County Medical Society Magazine. The information referenced in the article is current as of date of publication.


Click on the links below to find out more
about Asset Planning & Management's
Form ADV Part 2, Privacy Policy
and Disclosure Statement.

Form ADV Part 2

Privacy Policy


Company Info

Asset Planning & Management, Inc.

422 West Riverside Ave. Suite 722
Spokane, WA 99201
Phone: 509-838-4175 or 888-864-8827
Fax: 509-838-4206
Email: info@assetplanning.com