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The Financial Industry and What You Need to Know

Lindsey Fiske Thompson, Strategic Operations Advisor | Miranda Duggan, Administrative Assistant | June 15, 2016


New Department of Labor (DOL) regulations regarding fiduciary standards and the financial industry make it increasingly important to understand the different types of services and fees within the umbrella of the financial industry. Each sector of the financial industry operates, collects fees, and most of all interacts with clientele differently.

We have addressed some frequently asked questions and common concerns of clients about the investment community. With this blog, we want to aid in eliminating the confusion of the global who, what, where, when and whys when differentiating financial professionals.

Wealth Managers and Investment Advisors

Wealth managers or Registered Investment Advisors (RIAs) provide the greatest range of advice within the industry. From money management to creating financial plans, the comprehensive nature of this type of advisor offers unique and specialized services to each and every client. Each advisor offers a different range of services at their Firm and may charge fees accordingly.

RIAs typically work with high net worth clients to offer high quality, high touch services in every aspect of the client’s financial picture. The most common services offered are retirement planning, tax planning, philanthropic planning, financial planning, college planning, estate planning and wealth transfer guidance.

RIAs are required to register with the Securities Exchange Commission (SEC) or their state securities regulator, depending on the size of the Firm. Typically, fees are charged based upon a percentage of assets under management and can be located in a firms ADV I or plain English brochure.

Broker Dealer and Stockbroker

A broker is typically a person or company in the business of buying and selling securities on behalf of their clientele. They fall into two categories: full-service and discount, which indicate how fees will be charged and the level of service one will receive. Largely based on research and trading, the scope of a broker service is limited in comparison to an RIA.

Full service brokerage firms provide investment recommendations based on extensive research done on the client’s behalf. In addition, costs may be higher than discount brokerage firms due to extra commissions and expense ratios attached to the products that they sell. Discount brokerage firms are only responsible for completing a transaction on the client’s behalf. They offer online resources for clients to complete their own research but do not provide recommendations. Commissions can vary widely among brokerage firms and are typically based on the type of security traded (stocks, bonds, or funds). Mutual funds and exchanges-traded funds also have underlying fees called expense ratios which can vary widely. Information on expense ratios can be found on sites like

Financial Planners

Financial planners offer a robust amount of advice ranging from cash flow management to tax and estate planning. Planners typically work with clients to assess their current financial situation and plan for future goals. If a financial planner is not registered with the SEC or state, and hasn’t passed licensing exams, they are legally restricted from giving advice on what securities to invest in and when. Therefore, a financial planner of this nature can only give advice regarding asset allocations and investment strategies.

The term financial planner is broadly used in the industry, so it is important to differentiate professionals by their credentials and titles. Financial planners who are registered through the SEC as Certified Financial Planners™ are held to a fiduciary standards, similar to Registered Investment Advisors. By combining the CFP certification, as well as industry exams Series 7 and Series 63 or 65, financial planners are then legally able to advise on investments.


Robo-advising could be considered the “millennials” of the financial world. This up and coming method of asset allocation, portfolio construction, and financial planning capitalizes on the low cost and online accessibility of services. The financial planning that once was distributed via human interaction has now been automated to use algorithms to recommend portfolios and asset allocations according to the clients risk tolerance, financial goals, and long term plan.

The multitude of options robo-advising offers comes with pros and cons. Most robo-advisors have eliminated the required minimum portfolio size, which combined with advanced technology, welcomes a younger generation of investors who perhaps can’t afford to onboard with a professional advisor.  While streamlined, online access to financial databases and information may be attractive, it comes with downfalls that are important to consider. The imminent cybersecurity threat is present when populating personal financial information on the web. Simultaneously, as the experience is automated, investors lose touch with human interaction, dialogue, and perspective. Fiduciary requirements are not typically met by Robo Advisors.

To review the scope of service, fee’s, and credentials offered by these different types of professionals, please review the services chart, click here.  

How Weatherly Fits Into the Picture

Weatherly Asset Management, L.P. is a SEC Registered Investment Advisor. Our primary business focus is wealth management, with each account individually managed to maximize wealth preservation and growth over time. We also provide comprehensive advice related to retirement planning, tax planning, philanthropic planning, financial planning and college planning, as well as estate planning and wealth transfer guidance. Weatherly implements a tax and fee-only efficient structure. Please reference our Areas of Expertise on the bottom of Weatherly’s homepage.

To view more about Weatherly, and our listed competitors, check out the Top 10 Best Advisors in San Diego published by Advisory HQ, listed on our Weatherly in the News page.

To research our Firm via the website, please click

Useful Tools to Help Gauge Your Financial Professional:

The Securities Exchange Commissions offers a vast database to explore different Firms, services and financial professionals. Please reference

The Financial Industry Regulatory Authority (FINRA) can be used to narrow your focus and designate which type of financial professional is right for you. Please reference

To research brokers specifically please reference Here you can obtain background information including registration and licensing.


** The information provided should not be interpreted as a recommendation, no aspects of your individual financial situation were considered. Always consult a financial professional before implementing any strategies derived from the information above.