Skip to main content
SCC Banner Image
 |   |   |   |     Tyler Building
Skip Navigation Links
News | News Release Contact: Katha Treanor, (804) 371-9141
For Immediate Release: May 10, 2013

RICHMOND — Whether planning for a new home, retirement or your child’s college education, many Virginians seek assistance from financial service professionals in managing and growing their money. The State Corporation Commission (SCC) reminds investors of the importance of understanding the distinctions between the various types of financial service professionals.

“When selecting a financial service professional, it pays to understand the differences between a broker-dealer agent, an investment advisor, and a financial planner. Each serves a different role in helping with your financial future and their obligations to you as a client vary,” said Ron Thomas, director of the SCC’s Securities Division.

Anyone registered as an investment advisor must, by law, act as a fiduciary and put the interests of his or her clients ahead of their own. However, broker-dealer agents – which can include stock brokers, financial consultants, financial advisors, and registered representatives – are only obligated to recommend securities that are suitable for clients based upon factors such as the client’s age, risk tolerance and investment goals. Financial planners design an overall plan for their clients to save, invest, and manage their money. Planners who provide specific investment advice – such as recommending particular financial products or investments – must be registered as investment advisors and are subject to a fiduciary duty.

The Securities Division offers information on its website that provides basic information on the various types of financial service professionals and their obligations to investors. Before doing business with any investment professional, Thomas urges investors to contact the Securities Division to determine whether the individual, firm, or investment opportunity are properly registered and if there have been any complaints or disciplinary problems involving that individual or his or her firm.

“The information you need to make an informed choice about who you trust with your money is right at your fingertips,” Thomas said. He encourages consumers to ask the following questions and get information in writing:

  • What services do you offer?
  • What licenses, registrations, qualifications, and experience do you have to offer these services?
  • Are you a broker-dealer agent, investment advisor, financial planner, or any combination thereof?
  • Can you provide me with your Central Registration Depository (CRD) number, and, if not, why not?
  • Are you required to always act in my best interest?
  • Do you have any potential conflicts of interest when providing me with investment advice?
  • How are you paid? Explain commissions or fees you may charge.

“Be wary of high-pressure tactics, pie-in-the-sky promises, or investment opportunities that do not meet your particular objectives,” Thomas said.

To request background information about a stockbroker, contact the SCC’s Division of Securities and Retail Franchising toll-free (in Virginia) at 1-800-552-7945 or in Richmond at (804) 371-9051 and ask for all materials from the CRD about that individual. For similar information about an investment advisor, ask for all materials from the Investment Adviser Registration Depository. These computerized national databases contain licensing and registration information on more than 650,000 stockbrokers and more than 260,000 investment advisors. You can also receive information on their employment, examination and disciplinary histories, civil judgments, arbitration decisions, criminal convictions or indictments, bankruptcies, as well as pending complaints, disciplinary actions, arbitration, and civil proceedings.

For more information, visit the Securities Division website at or the North American Securities Administrators Association website at Link logo