Today's Marketplace (Who to Trust)

Financial services in today’s industry can be grouped into two basic categories: registered representatives (brokers) and investment advisors.

These two groups are governed by different regulatory agencies. Accordingly, despite the similarity in the services offered by registered representatives (brokers) and investment advisors, there are notable differences in their responsibilities to clients. Delta Financial Advisors, Inc. feels that clients should be aware of the differences in the industry expectations and the services provided through each relationship.



Registered Representatives

Registered Representativesare brokers employed by broker dealers, and are regulated by the Financial Industry Regulatory Association (FINRA), the SEC, and state organizations. Registered representatives (brokers) are obligated to follow a “suitability standard,” which means that they must ensure that investments are suitable for the client’s individual circumstances. Once a suitable investment is identified, brokers facilitiate and assist clients with the purchase or sale of securities through their Broker/Dealer. In return for this assistance, the broker receives a commissionfor each transaction executed on behalf of the client. The commission is compensation for both the individual broker and the Broker Dealer supporting that individual. Investment advice offered by brokers must be purely incidental to the brokerage services provided.

A broker must pass registration exams such as Series 6 or 7, as well as any other exams required by the broker's state of business.

Investment Advisors

Investment Advisors are regulated by the Securities and Exchange Commission (or the advisor’s state securities department) and are required to act as fiduciaries for their clients, meaning that they must act in their client’sbest interest as required by the Investment Advisors Act of 1940. To the best of their ability, they must identify investments that are not just suitable, but they must also provide the best available investment strategy to meet their client’s financial goals.  In addition, they provide ongoing investment advice to review those investments in the face of their client’s changing circumstances. Investment advisors can often incur significant expenses in researching investment options, creating financial strategies, and documenting the entire process. This expense is generally compensated in the form of ongoing fees paid by the client to the advisor.

As part of their regulatory requirements, investment advisors must adopt a code of ethics. They also must file and maintain a form ADV with the SEC or state, and provide the document to all clients. This form discloses extensive information regarding business practices and any conflicts of interest that may exist in the investment advisor’s business. With these and other regulations in place to protect the client’s interest, investment advisors are able to offer financial planning services.

So How Does Delta Financial Advisors, Inc. Operate?

As an investment advisor representative with Delta Financial Advisors, Inc., we have the ability to serve clients in all 50 states. For clients who desire continuing investment advice and asset management, Delta performs research to deliver appropriate ongoing advice and is compensated by charging fees as a percentage of assets under management.

Delta Financial Advisors, Inc. also employs individuals who are Registered Representatives (brokers) to provide brokerage services, recommend suitable securities, and facilitate securities transactions. These brokers are compensated by a commission after each transaction.

Additionally, clients can engage Delta Financial Advisors, Inc. for independent financial planning. These services may be engaged comprehensively, or may be engaged in relation to a specific goal, such as retirement or college savings. These services are provided at an hourly rate.