Registered Investment Advisor versus Broker

Why should you choose a Registered Investment Advisor over a Broker?

Registered Investment Advisor Broker
Fiduciary Suitability
Advice Transactions
Transparency Disclosure
3rd Party Custody In-house Custody
Ethics Legality

Fiduciary vs. Suitability

Asset Management Services, Inc. (AMS) is a registered investment advisory firm.  This means we have a fiduciary duty to act in the absolute best interest of our clients.  We must follow the trust standard, the highest in law, which requires us to place the interests of our clients ahead of our own interests.  AMS does not work for a broker-dealer; we only work for our client.  On the other hand, brokers only have a suitability standard, which means they only need to provide suitable advice which may not be the absolute best advice for the client.

Advice vs. Transactions

Brokers are paid commissions on products sold, so they are looking to sell, sell, sell.  AMS does not earn commissions; we earn a fee based on the amount of assets a client has with us.  AMS provides advice to our clients, not transactions.  

 Transparency vs. Disclosure

Brokers provide disclosure of their fees through a prospectus, which can be difficult to understand if you do not have experience with investments.  AMS provides full transparency of all our fees and costs.  We will discuss all aspects of our fees with you so you know where every penny of your money is going.  We also provide fee reports which show full transparency on all the fees you are paying.

3rd Party Custody vs. In-house Custody

AMS uses a 3rd party custodian for your assets.  We do not keep your assets in-house.  This gives us limited power over your assets; we have the power to buy and sell securities on your behalf, move funds between your accounts, and to have funds sent directly to you.  Brokers may also serve as a qualified custodian with direct access to the cash and securities maintained in client accounts, which may pose additional risks associated with misappropriation or loss of the assets maintained in these accounts.  By using a 3rd party custodian, you can cross-check the records we provide you with the records from the custodian.  This ensures you that your money is in all the right places at all times.

Ethics vs. Legality

AMS believes the best way to earn your trust is through sound advice and an open relationship with our clients.  We believe the ethics and values you will find at AMS for how we serve our clients is higher than any legal standard.  At the center of our values is the concept of fiduciary duty, and we pledge to you that we will never compromise these strong values.  


Who would you rather have on your side?

Scholarly Articles about RIAs versus Brokers:

(select the article title below to view the article in a new tab)

The Critical Difference Between a Stockbroker and Registered Investment Advisor

Most advisers overstating their expertise: Cerulli study

B/D or RIA? How to Decide for Yourself

The following video is a clip from The Inside Job, a documentary produced, written, and directed by Charles Ferguson.  

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