Help Wanted: Finding the Right Financial Help

~ By Gerald Rome, Acting Securities Commissioner , Colorado Division of Securities ~ 

For most of us, the thought of managing and investing our own money is overwhelming. Is Netflix trading at a discount? Is my portfolio appropriately diversified? Am I earning a rate of return that will allow me to retire in 10 years? Fortunately, there are thousands of financial services professionals who can help with financial decisions. However, finding the right financial services provider can be just as overwhelming as handling the money ourselves. This article is designed to help guide you find the right financial help by answering a few basic questions.

Who are the Financial Services Providers and What Services Do They Offer?
Financial services providers fall into three categories; 1) investment advisers, 2) stockbrokers, and 3) financial planners. Investment advisers offer advice about investing in securities and may provide ongoing oversight and management of your portfolio of various investments. Stockbrokers help you buy and sell securities and may provide recommendations about your investments. Financial planners consider your entire financial situation and may develop a long-term, comprehensive financial plan by taking various factors into account such as insurance, taxes, estate planning, and investments.

How Do You Pay for These Financial Services?
There are a few basic ways that you can pay for these financial services. First, for most investment advisers, you annually pay a small percentage of the amount of money you invest. Next, you may pay a commission to your stockbroker each time you buy or sell a security. Last, many financial planners may simply charge you a fee. These fees can include flat fees, hourly fees, or a retainer fee for a particular service.

How Does the Law Protect You and How Can You Protect Yourself?
Investment advisers are required to put your interests ahead of theirs at all times by recommending investments they think are best for you. They are also required to tell you how they are paid and problems they have had with regulators. Stockbrokers are generally not required to put your interests ahead of theirs and are not required to give the same up-front disclosures, they are required to only recommend investments that are suitable for you. Finally, a financial planner’s requirements depend on the services they provide. They may be regulated as an investment adviser and/or stockbroker.

As an investor, you need to be vigilant. First, ask which licenses and titles the person you are dealing with has and make sure you independently verify what they mean and how they were awarded at, or by calling us at 303-894-2320. Additionally, make sure your stockbroker or investment adviser is properly licensed by simply calling our office. Any reputable provider should be happy to discuss these issues with you and answer any questions you may have. For background information on investment advisers or stockbrokers, contact us at 303-894-2320.

For additional background information on stockbrokers, you can visit:

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