At the McGowanGroup, we understand that navigating the Investment Strategy and Wealth Management industry can be tricky. Registered Investment Advisors are known by a variety of names and they all seem to provide different services. Our goal, however, is provide education and clarity to our clients and that starts with explaining the difference between Registered Investment Advisors and Broker-Dealers.
An Important Distinction
All financial advisors are registered with one of two broad camps: Registered Investment Advisors (RIAs) and Broker-Dealers (BDs). RIAs can either be registered with the State they are located OR can be registered directly with the Securities and Exchange Commission (SEC) based on Assets under Management (AUM). They offer specific advice and trading to their clients and usually operate on a percentage of AUM.
Broker-dealers, meanwhile, are registered with the Financially Industry Regulatory Authority (FINRA) which is a self-regulatory entity authorized by Congress. Advisors typically earn commissions based on the different investment products (e.g., stocks, bonds, and annuities) that they sell. Usually, these products are sponsored by the BD they are affiliated with, and the advisor can rarely deviate from these offerings.
Our Fiduciary Responsibility: Putting Your Best Interest First
An RIA is bound to the concept of Fiduciary Duty. In laymen’s terms, this means that advisors with an RIA are required to act in their clients’ best interest with regards to any solutions offered. To be an advisor with a RIA is to exhibit loyalty to any client with whom they’ve entered a business arrangement, as well as to care for any assets with which they’ve been entrusted.
Investors should take care to remember that non-RIAs are not required to practice Fiduciary Duty, though any financial advisor worth their salt will strive to serve their clients in a satisfactory manner. BDs are held to a Client Suitability standard which is not as robust as the Fiduciary Duty standard. Therefore, when given a choice between working with an RIA or a Broker-Dealer, it may be prudent to go with the RIA. While a financial advisor affiliated with a BD is usually beholden to the Firm that employs them, an RIA is beholden—first and foremost—to their client.
We Are the McGowanGroup
The McGowanGroup is an RIA firm based in Dallas, TX. We provide a wide range of services to our clients in order to improve Cash Flow and establish Generational Wealth, including (but not limited to):
- Business Planning
- Investment Strategies, Portfolio Management and Asset Allocation
- Tax Planning
- Retirement, Estate and Legacy Planning
- Philanthropic Giving Strategies
- Trust and Estate Planning
All advisors at the McGowanGroup are registered Investment Advisor Representatives, which allows us to put client success and satisfaction above everything else. Our commitment to Education, Excellence in Service and the pursuit of Superior Client Profits allows us to confidently consider ourselves among the best RIAs in Dallas and the DFW Metroplex at large.
Financial planning can be difficult or stressful, especially if you try to go about everything on your own. But never fear: The Team That Cares is here to help!