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This question is about what a finance advisor does, what a stock broker does, and finance advisor.
Broker vs. Financial Advisor
A broker earns a commission on the sale of some type of investment, while a financial advisor earns money by giving people advice on their finances.
A broker is licensed by the Financial Industry Regulatory Authority (FINRA) to buy or sell securities. Brokers must adhere to the suitability standard which means that an investment or product need only be suitable for an investor's situation. This means a broker can recommend one investment, even if another is a lower cost or better option.
A financial advisor follows the fiduciary standard which requires them to act in the best interests of their clients. They can never recommend a product or investment if a better option is available. It is possible for a financial advisor to also be a broker.
There are many differences between a broker and a financial advisor including licensing requirements and the scope of their duties.
Here are the key differences between a broker and a financial advisor:
A broker must be licensed by the FINRA in order to buy or sell securities
There are no licensing requirements for a financial advisor and a financial advisor can also be a broker
A broker is paid on commission from their product or investment sales
A financial advisor cannot earn a commission if they are functioning as a fiduciary as this may present a conflict of interest. However, they can earn a fee and commissions if they are working as both an advisor and a broker
A broker is involved in the buying or selling of goods and services
A financial advisor is not involved in the actual purchase or selling, rather they are an advice-giver
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