Finance: What is an Investment Adviser, and an Investment Adviser Representative?

What is an investment advisor? Well, as a registered Shmoop advisor, we'd advise that you watch this video.

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Transcript

00:22

to where you're going to quote invest unquote your slippery

00:25

five bucks But when an investment advisor actually gets serious

00:31

they have to register generally in the state or states

00:35

in which they're doing business and we mean geographic states

00:38

not like euphoria and depression Structurally they have to know

00:42

how the markets work all kinds of ethical and fiduciary

00:45

obligations that they'll hold for clients they have to understand

00:49

the mathematics of brokers and brokerages and the basics of

00:52

risk Most registered investment advisors have at least a serious

00:56

sixty five exam behind them not a whole lot more

00:59

like the series seven a bunch of others mainly because

01:02

investments never goes smoothly and someone always ends up getting

01:05

sued for bad advice So when firms hire registered investment

01:10

advisors they at least want the protection of being able

01:13

to point to an exam that the broker past that

01:16

Presented basic competence in their understanding of what they were

01:19

at least supposed to have done The key The limiter

01:22

here between the craps table guy in the registered investment

01:26

adviser is compensation Largely The craps table guy offers his

01:30

opinion for free The aria charges money or at least

01:34

wants to and as soon as cash changes hands and

01:37

formal manner while the rules and responsibilities and whole set

01:42

of fiduciary obligations get a whole lot less you know 00:01:46.149 --> [endTime] dicey