- Investment advisors charge clients a fee negotiated in advance and
cannot
earn
any other profits from their clients without the clients' prior consent.
Most investment
advisors are paid an asset-based fee, so their interests are
aligned with
their clients.
Brokerage firms' revenues may increase even if the
customer's assets shrink.
Investment advisors manage money in the best interests of their clients.
- They do not engage in other business activities like investment banking
or
underwriting, which brokerage firms do. These other businesses may cause
a brokerage firm's interest or attention to focus on other areas of the
firm
outside
of their retail brokerage business and customers.
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