An RR, a broker and an account manager, is not bound by the same fiduciary requirements. The broker is expected to meet “investor suitability” standards when recommending securities transactions on a customer’s behalf. However, often their incentive is to recommend securities underwritten by their firm. (A thorough review of brokers firms’ Web site disclosures spells out the details, but in fact few consumers and novice investors read the materials.) This is not to suggest that an RR, especially those who devote attention and concern to their clients with whom they have established relationships, won’t always act in the investor’s best interest. But RRs are not, strictly speaking, in the business of providing broad financial advice. The RIA, in comparison, is primarily in the business of providing “big-picture” financial guidance. Based upon the client’s needs, objectives, and time frames, RIAs can develop an investment plan to be implemented and managed on a fee basis. Stephanie Enright owns Enright Premier Wealth Advisors of Torrance. Write to her at the Daily Breeze, 5215 Torrance Blvd., Torrance, CA 90503-4077. If you need financial advice, include a stamped, self-addressed envelope so you can receive a confidential questionnaire. Only letters chosen for publication will be answered; your real name will not be used. 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREStriving toward a more perfect me: Doug McIntyre Few consumers really understand the adviser differences Joel asks about, for common reasons: Many individuals claim to be “experienced” or “appropriately credentialed” to handle and competently invest large sums of money. Some may be insurance agents or others whose primary business and knowledge base is fairly strictly focused. Joel probably will end up with either a registered investment adviser (RIA) or a registered representative (RR), also known as a stockbroker. Although both RIAs and RRs are licensed to sell securities, there are fundamental differences beyond that. RIAs typically operate in independent firms and mostly advise clients and manage investment portfolios. RIAs are regulated by the Securities and Exchange Commission or individual states. They charge a fee, not a commission for their services. RRs, who generally are employed or contracted by brokerage firms, primarily engage in buying and selling securities. RRs are generally compensated through commissions on the product sale and purchase transactions, and they are regulated primarily by the National Association of Securities Dealers but also by the SEC and certain states. The difference that’s most important is the RIA has a strict legal fiduciary responsibility to act in the investor’s best interest in all aspects of the financial relationship. In the past year, Joel has been approached by about a half-dozen individuals, ranging from a savvy neighbor and former chiropractor to his insurance agent, all of whom have offered “expert advice” on managing his finances. “Ever since my aunt left me $400,000, people have lined up to offer advice – casually or as a business proposition,” writes the 40-year-old once struggling Manhattan Beach screenplay writer. “So far, I haven’t paid attention to any of it. The money is safely tucked away in `low-earning bank accounts’ at the moment, until I decide what to do.” Joel has asked for a basic starting primer on the different types of investment advisers, the meaning of their designations, and how those designations might influence his choice. Joel’s wait-and-learn attitude is a sound move at this point, but the sooner he secures professional help, the more likely he will turn stagnating funds into a basis for future financial security. If he cannot get recommendations from friends or family members on decent advisers, he’ll have to start from scratch.