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Before you invest. . .

Know the differences among financial service professionals and learn how to check them out.

Financial Professionals
What financial services do they offer? How do they charge?
Broker-dealer Registered investment advisers Financial planners
What they do Buys and sells securities - stocks, bonds, mutual funds, and certain other investments. Broker-dealer generally refers to a firm. An individual is a broker or registered representative.

Common names for the individual:
  • stock broker
  • financial or investment consultant
  • registered representative
  • salesperson
  • Advise you on securities and other investments; provide ongoing management. Registered investment adviser generally refers to a firm.

    Common names for the individual:
  • asset managers
  • investment counselors
  • investment managers
  • portfolio managers
  • wealth managers
  • investment adviser representative
  • Design an overall plan for you to save, invest and manage money. Can include retirement planning, tax planning, estate planning.
    How they are paid Commissions. You pay every time the broker buys or sells on your behalf. Example: $12 per trade. Flat fee (such as $2,000 a year) for a financial plan or fee based on a percentage of assets you want them to manage. They must tell you how they are paid. Depends on whether they are licensed as a broker-dealer or registered as an investment adviser. May charge combination of fee and commission.
    Obligation to you Recommendations must be suitable at all times and be based on your needs such factors as your risk tolerance, income, age, and investment goals. Must put your interests ahead of their own (fiduciary duty). You may grant authority to make decisions about investments without prior approval. Must put your interests ahead of their own (fiduciary duty).
    Warning Because of commission structure, brokers may have incentives to sell financial products that appear suitable, but are not the best for you. Ensure you are comfortable with your investment adviser and that the adviser understands your investment objectives, including your risk tolerance. Financial planners are not regulated but a financial planner who is also a registered investment adviser is regulated by state or federal agencies.
    Who regulates U.S. Securities and Exchange Commission (SEC) - a federal government agency - oversees broker-dealers, investment advisers, and mutual funds.

    The Financial Industry Regulatory Agency (FINRA), a self-regulator, licenses broker-dealer firms and the financial professionals that work for the broker-dealer.

    Broker-dealers operating in Oregon must be licensed by the Oregon Division of Finance and Corporate Securities (DFCS).

    Find information about broker-dealers and individuals:

    Call FINRA, 800-289-9999 (toll-free).

    If managing more than $110 million in assets, must register with SEC. If managing less than that amount, generally licensed with DFCS.
    Find information about investment adviser firms and individuals (SEC Investment Adviser Public Disclosure database).

    See if an investment firm is licensed with the DFCS: (http://www4.cbs.state.or.us/ex/dfcs/dfcslic/adviser/search/index.cfm)

    Call DFCS, 866-814-9710 (toll-free)

    Optional certification as Certified Financial Planner, or CFP.
    The CFP board maintains a database of planners at (http://www.cfp.net/utility/find-a-cfp-professional).
    Red flags

    Be concerned if a financial professional:

  • Ignores your financial objectives
  • Cannot explain how a product will make money
  • Suggests that you take out a mortgage, reverse mortgage, or other loan to invest
  • Recommends that you cash out current holdings (life insurance, for example) to fund other investments
  • Pressures you to invest today or tells you to keep the investment secret
  • Does not provide any documents or require signatures on agreements
  • Oregon regulator contact information The Oregon Division of Finance and Corporate Securities regulates financial services in Oregon and investigates complaints. In Oregon, call 866-814-9710 (toll-free).


    When hiring a financial professional, ask:

  • What services do you offer; What products can you sell?
  • What licenses, registrations, qualifications, and experience do you have?
  • Are you a broker, investment adviser, financial planner, or a combination?
  • Are you required to always act in my best interest?
  • How are you paid? What are commissions or fees you may charge?
  • Does someone else (such as a fund company) pay you for offering or selling these products or services?
  • Professional titles

    Organizations in the investment and insurance industries offer continuing education and issue credentials. The credentials ensure the person is qualified to perform a job or task. An example is Certified Financial Planner, or CFP. However, some salespeople give themselves titles with similar-sounding names to imply they are experts when they might have attended just a one-day sales course or purchased a title online.

    To better protect seniors and other investors in Oregon, investment salespeople and insurance agents cannot use credentials that are nonexistent, self-conferred, or are from organizations that:

  • Primarily teach sales/marketing
  • Do not take steps to ensure students are competent
  • Do not monitor and discipline students for improper conduct
  • Do not have reasonable continuing education requirements
  • For information, contact us at 866-814-9710 (toll-free).
    Click here for a FINRA list of common designations.