Broker Check

About

Many discussions with new, and even current clients are about licenses.

Would we go to a doctor without a license?

Would we go to a dentist for brain surgery?

An investment adviser is generally defined as any person who receives compensation in the business of advising others as to the value of securities or as to the advisability of investments in, purchasing of, or selling of securities. Investment advisers must obtain registration in the states where they conduct business.

According to Florida regulations, no investment adviser shall engage in business from offices in this state, or render investment advice to persons of this state, unless the investment adviser is registered with the Office of Financial Regulation (OFR) pursuant to Section 517.12(4), Florida Statutes (F.S.).

How do we know if a financial advisor is appropriately licensed (or registered), and legally qualified to offer the advice we need?

How do you know who is the right advisor to deal with?

Generally, the three most popular or common licenses (or registrations) are:

Insurance

This license includes life insurance, health insurance, long-term care and fixed annuities (this includes Index Annuities).

If all you need is life, health, long-term care or fixed annuities (this includes Index Annuities), then you "may" only need an insurance agent.  However, with only this license, insurance agents typically are not properly registered to offer you investment advice. If you want a "managed account", or "Fee-Only" or "Fee-Based" account, then an insurance agent may not be able offer what you are looking for.

General Securities Representative (Series 7)

An individual who passes the Series 7 exam is qualified for the solicitation, purchase and/or sale of all securities products, including corporate securities, municipal fund securities, options, direct participation programs, investment company products and variable contracts. This includes, but is not limited to; stocks, ETFs, bonds, mutual funds, variable annuities, REITs (Real Estate Investment Trusts), UITs (Unit Investment Trusts), oil & gas programs, hedge funds, and several other types of investments.

Typically, securities business done with Series 7 Representatives are commission-based transactions done in a brokerage account with no requirement for ongoing management or advice.

Investment Adviser Representative (Series 65 or 66)

The Series 65, Uniform Investment Adviser Law Examination, is for investment adviser representatives. Passing the Series 66, the Uniform Combined State Law Examination, qualifies an individual as if he or she had passed both the Series 63 and Series 65. However, to register as an investment adviser representative based on the Series 66, an individual must also have passed the FINRA Series 7 exam and the exam must be valid (i.e., not expired).

This registration enables representatives to assist clients in opening & managing "Managed Accounts", which may include "Fee-Only" or "Fee-Based" accounts.

If you prefer to pay an ongoing fee instead of commission, then you may want an Investment Adviser Representative. With ‘fee-only’ or ‘fee-based’ accounts realize that you may be paying a fee for the life of the account. Over ten or twenty years this additional fee can potentially add up to an amount higher than a commission paid in a brokerage transaction.

A potential drawback to a ‘fee-only’ advisor compared to a ‘fee-based’ advisor is that some investments may not be offered in ‘fee-based’ accounts.  For example, there are some annuities that are not offered to ‘fee-only’ advisors.

Does it make sense to deal with an advisor who is licensed or registered to offer you all three options?

We think so.

 

At Atlantic Financial Advisors, LLC Scott does it all.

President & owner, Scott Olson, is licensed as an Investment Adviser Representative through both Atlantic Financial Advisors & Independent Financial Group. This dual registration status offers you the opportunity to decide whether you would prefer a managed account with an annual fee or a brokerage account that is commission based.

Why is being Securities Registered important to you?

Many clients are looking for or currently hold assets that may not correlate to the stock markets or interest rates such as private equity and private debt offerings, senior secured debt funds, REITs (Real-Estate Investment Trusts), oil & gas partnerships and other alternative investments. Non-Correlated assets have been incorporated into many of the largest charitable endowment funds at large institutions like those at the universities of Yale and Harvard.

Your Portfolio Deserves a Second Opinion

How are your investments performing? Could they do even better? With Morningstar’s Risk Analysis along with Riskalyze Analytical software, we offer a complimentary risk evaluation of your current portfolio to determine your ideal mix of risk tolerance & asset allocation.

Riskalyze software and customized MorningStar Risk/Return Analysis can help identify the risk of your current portfolio which can be used to match you up with investments that may be more aligned with your preferred risk tolerance. Many clients appreciate being given a risk tolerance analysis as they have never seen one before or how it may impact their future financial plans.