When you sit down with a financial professional, you probably assume they are legally required to give you the best possible advice for your specific situation. Surprisingly, that is not always true. The financial services industry is roughly divided into two very different business models: Commission-Based Brokers and Independent Registered Investment Advisors (RIAs) . From the outside, the offices look the same and the job titles sound identical. But behind the scenes, the way these professionals are compensated—and the legal standards they are held to—could mean a difference of tens of thousands of dollars to your retirement over time. Here is a look behind the curtain at how these two models work, the pros and cons of each, and how to know which one is right for your money. The Broker Model: Commission-Based Products Brokers (or registered representatives) work for broker-dealers—often the big, household-name "wirehouse" banks. Their primary function is to execute tr...
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