Merrill Lynch boosts assets, adds advisers
Bank of America Corp’s (BAC.N) Merrill Lynch brokerage business provided a bright spot in an otherwise dismal first quarter for the bank, reporting sharply higher revenue and client assets as well as a net increase of nearly 200 financial advisers.
It’s subtle isn’t it? …No, not the puff-piece story.
You probably didn’t even notice it. –It might be a typo. The increase in financial advisers.
You see, there’s a pretty monstrous difference between an Advisor with an ‘O’ & an Adviser in practice. Your friendly neighborhood broker is typically called a Financial Advisor. Not an Investment Adviser or Financial Adviser. At least not always. There’s a reason. Their role is as chameleon-like as their title, changing minute to minute & without having to tell you. Cute, but slippery, and sticky in certain places.
It all comes down to fiduciary responsibility, which makes self-dealing really hard. And Wall Street loves dealing to itself.
So instead, you are placed in relationship silos.
For this trading account? I’m your broker aka your Financial Advisor. For that advice account? I’m your Investment Adviser. For bonds, I’m a broker so I can make some commissions. For telling you which investment managers to pick, I’m an Adviser. For mutual funds, if it’s a small amount of money– probably broker. If it’s a big pile of cash, Adviser. Stocks? Could be an Advisor or an Adviser.
Annuity? Broker. Long-Term Care? Broker. Financial Plan? Adviser, but to implement it– Advisor. Life Insurance? Advisor, which really means broker.
Confused yet? Probably. Now add an army of bankers, stuffing god knows what into the mutual funds & managers you’re using. Put another way — no matter how you slice it, the house always wins.
Here’s the actual rule on where the lines are drawn.
Section 202(a)(11)(C) of the Investment Advisers Act of 1940 exempts from the definition of an Investment Adviser (and therefore the associated fiduciary standard) “any broker or dealer whose performance of such services is solely incidental to the conduct of his business as a broker or dealer and who receives no special compensation therefor.”
Kind of depressing isn’t it? Yeh– make sure to consult your Financial Advisor about this one. Or maybe your Financial Adviser.
See Also:Terms & Conditions page for a full disclaimer.
iheartWallStreet.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com and affiliated sites.