Difference Between An Independent Agent and Broker?

[yellowbirdnj]

Not sure why folks like to dig up threads that are quite old as their first post. ??

But, since we're here... yellowbird, what you say makes sense. So what would you call yourself if you have a series 65 license, or a series 6/63, or 7/66? Just curious.

I've always heard that if you only sell life/health/annuities.... you should never call yourself an advisor (even though you are advising clients quite often). Technically you don't have an "advisor" license, you have an insurance license. But what about those that have insurance license and securities license?

Very good point! What should someone who has a 6/63 license call themselves? The correct term is Registered Representative. Same if you have a 7/66. The best way to describe yourself in my opinion is to use the term Registered Representative and then list what you do in the securities realm.

A 65 is more complicated over recent changes on where they have to register. The 65 is called a Fee Planner by FINRA, however, its still a registration, and leads to the Registered Investment Advisor. Also, recent changes have moved most Fee Planners to the states, and the states have leeway on how to name them. Some states are getting creative on how to regulate them. So the FINRA definition may not apply. From reading Financial Planner mag and Investment Advisor, this is a major and controversial issue with the financial planner crowd.

 

[pfg1]

The technical name for a person holding a 65 is "Investment Advisor Representative", so I guess technically with that license you could call yourself an advisor - whether or not you had any of the other licenses.

I see alot of folks that only have a life ins license call themselves advisors. No way would I do that, just asking for trouble.

Same thing with "Planners". I know the powers that be frown on anyone calling themselves a financial planner, without having a CFP designation.

 

[yellowbirdnj]

The technical name for a person holding a 65 is "Investment Advisor Representative", so I guess technically with that license you could call yourself an advisor - whether or not you had any of the other licenses.

I see alot of folks that only have a life ins license call themselves advisors. No way would I do that, just asking for trouble.

Same thing with "Planners". I know the powers that be frown on anyone calling themselves a financial planner, without having a CFP designation.

No. The 65 is just a test that used to qualify for the Registered Investment Advisor. Without the RIA its a qualification that test stays on your FINRA registration as a qualification. So if you are a Registered Representative, you may hold the 6/63 or 7/66 or the 65 (there are way more tests available). Just because you have that qualification does not mean that you can exercise it. One must set up an RIA to be able to use the 65 or work for an RIA.

The CFP is a professional designation and not a license. You don't need a CFP to set up an RIA, no more than you need to have a CLU to set up a life/health agency. However, if you get the CFP, or ChFC, or CIMA or CFA, the series 65 test is waived at the federal level. The states can differ and create their own requirements but usually accept the FINRA 65 and designation waivers.

 

[pfg1]

No. The 65 is just a test that used to qualify for the Registered Investment Advisor. Without the RIA its a qualification that test stays on your FINRA registration as a qualification. So if you are a Registered Representative, you may hold the 6/63 or 7/66 or the 65 (there are way more tests available). Just because you have that qualification does not mean that you can exercise it. One must set up an RIA to be able to use the 65 or work for an RIA.

The CFP is a professional designation and not a license. You don't need a CFP to set up an RIA, no more than you need to have a CLU to set up a life/health agency. However, if you get the CFP, or ChFC, or CIMA or CFA, the series 65 test is waived at the federal level. The states can differ and create their own requirements but usually accept the FINRA 65 and designation waivers.

Right. I guess what I meant is if you have the 65 AND are registered to work with a Registered Investment Advisor (RIA) - then you become an Investment Advisor Representative (IAR). So I guess you could call yourself an "advisor" at that point.

Regarding the CFP....yes, its a designation. My point was... that FINRA et al frown upon folks calling themselves "planners" w/o proper designations and/or licensing. I've seen folks that do call themselves financial planners or financial advisors, even though they only hold an ins license.

I have always been told to steer away from calling yourself something you are not licensed/qualified for. I think in this day and age where everyone is sue happy..... that is probably good advice.

 

[jensing0406]

That's right, your licenses and definitions of what you can do is your best defense. When you state that you are a specialist, consultant, broker, counselor, advisor, etc, then you are opening a door during a lawsuit that you are claiming to have above and beyond knowledge or specialty, to handle a problem or issue. All of these other names, that agents come up with, like Senior Final Expense Specialist, Senior Living Specialist or Retirement Mutual Fund Counselor, or whatever name seems cool, really is for the agents ego, and not really benefiting them or the consumer. When I ask most of these people what training they have beyond the agents pre licensing and test, they say that they none. Most of these people also will make statements like professional designations are worthless. Yet they are people that make their own unique designation statements in the names that they come up with to define themselves to consumers.

This is coming from a guy who probably writes no business

 

[yellowbirdnj]

This is coming from a guy who probably writes no business

How do you justify such a comment may I ask?

 

[jensing0406]

How do you justify such a comment may I ask?

It's easy... Anyone who's trying to preach about getting sued because of verbiage of saying Agent or broker and worried about being sued, isn't writing enough business to afford e and o. Also if you're building a relationship with clients you can tell them you're Santa clause and it won't matter.

Honestly I've read some dumb **** on these forums but this has to be one of the dumbest.

 

[yellowbirdnj]

It's easy... Anyone who's trying to preach about getting sued because of verbiage of saying Agent or broker and worried about being sued, isn't writing enough business to afford e and o. Also if you're building a relationship with clients you can tell them you're Santa clause and it won't matter.

Honestly I've read some dumb **** on these forums but this has to be one of the dumbest.

You got it reversed. The person that is writing a lot of business is more likely to get sued over issues like these. The person who just sells policies to their friends and families are the ones that don't have to worry. By the way, I own my own agency and carry e and o. Also, I brought my insights to the table, and I am sure that it is debatable, but what did you bring? That e and o comment was bizarre.

 

[DHK]

Very good point! What should someone who has a 6/63 license call themselves? The correct term is Registered Representative. Same if you have a 7/66. The best way to describe yourself in my opinion is to use the term Registered Representative and then list what you do in the securities realm.

A 65 is more complicated over recent changes on where they have to register. The 65 is called a Fee Planner by FINRA, however, its still a registration, and leads to the Registered Investment Advisor. Also, recent changes have moved most Fee Planners to the states, and the states have leeway on how to name them. Some states are getting creative on how to regulate them. So the FINRA definition may not apply. From reading Financial Planner mag and Investment Advisor, this is a major and controversial issue with the financial planner crowd.

Uh... close but no cigar.

The series 65 license is all about the Investment Advisors Act of 1940. It is officially called the "Uniform Investment Advisor Law Examination". It is for fee-based asset management and a fiduciary responsibility in regards to advising in matters of SECURITIES.

The Series 65 is for registration as an IAR - Investment Advisor Representative... who represents their Registered Investment Advisory Firm.

It has EVERYTHING to do with securities, advice (in exchange for material financial benefit), and fiduciary duty in regards to that advice. It has nearly NOTHING to do with "planning" or overall "financial advice" for the entire picture, however most regulators, B/Ds and insurance companies DO believe that... to be more cautious with regulators.

For the topic of what to call yourself, check out this article: Identity Crisis | InsuranceNewsNetMagazine.com

As for me, I'm a licensed life and health insurance agent... but no securities licenses (anymore). I still have my ChFC designation, so I call myself a Chartered Financial Consultant BECAUSE I completed that course of study. I know what I can and cannot advise on, so I freely use that title... even without securities licenses.

 

[pfg1]

Uh... close but no cigar.

The series 65 license is all about the Investment Advisors Act of 1940. It is officially called the "Uniform Investment Advisor Law Examination". It is for fee-based asset management and a fiduciary responsibility in regards to advising in matters of SECURITIES.

The Series 65 is for registration as an IAR - Investment Advisor Representative... who represents their Registered Investment Advisory Firm.

It has EVERYTHING to do with securities, advice (in exchange for material financial benefit), and fiduciary duty in regards to that advice. It has nearly NOTHING to do with "planning" or overall "financial advice" for the entire picture, however most regulators, B/Ds and insurance companies DO believe that... to be more cautious with regulators.

For the topic of what to call yourself, check out this article: Identity Crisis | InsuranceNewsNetMagazine.com

As for me, I'm a licensed life and health insurance agent... but no securities licenses (anymore). I still have my ChFC designation, so I call myself a Chartered Financial Consultant BECAUSE I completed that course of study. I know what I can and cannot advise on, so I freely use that title... even without securities licenses.

That's what I was getting at DHK, thanks for stating it a little more clearly.

Great article too, thanks for sharing!

What I see alot of Insurance only producers using these days, Financial Consultant.... and Wealth Strategist.

To the topic of the OP, I believe that if you are an independent you are technically operating as a broker (you can shop and pick what is best), if you are a captive you are just an agent. What you call yourself..... well...