There are several types of financial advisors, including:
Registered Investment Advisers (RIAs):
- Registered investment advisers are registered with the Securities and Exchange Commission (SEC)
- They are required to act in the best interest of their clients
- To learn about how you can verify a registered investment adviser, see "Is your financial advisor legit?"
Brokers:
- Brokers are registered with the Financial Industry Regulatory Authority (FINRA) and are typically paid by commission for the financial products they sell
- BrokerCheck from FINRA tells you whether a person or firm is registered to sell securities (i.e., stocks, bonds, mutual funds, etc.) and/or offer investment advice
Insurance Agents:
- Insurance agents are advisors that sell insurance products, such as life insurance and annuities
- You can verify the status of an insurance agent's license by going to a state's division or department of insurance (visiting its website or contacting them)
- Insurance & annuities are regulated at the state level
Financial Planners:
- Financial planners provide comprehensive financial planning services
- They may also be registered with the SEC or FINRA
Robo-Advisors:
- Robo-advisors are a relatively newer type of advisor that uses algorithms to provide investment advice and manage portfolios
Private Bankers and Wealth Managers:
- Private bankers and wealth managers provide services, such as investment management and financial planning for high-net-worth (HNW) individuals
This is a high-level summary. Please refer to FINRA:“Choosing an Investment Professional” for a more comprehensive explanation.