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The 3 Types of Financial Advisors

The following is a shortened transcript from a longer YouTube video on our channel. To view to longer video, visit

Hey, Kimsey here, Hollifield Financial Group. I want to talk to you for a minute today about how financial advisors can structure their businesses.

There's three main ways that a financial advisor will actually set up their business. Number one is through a bank, number two is through what we call a wirehouse or a big corporate company, and number three is the independent space.

So let's talk about banks right now. We know banks; we trust banks. You go into the bank... That's the first account you ever had was your checking account, your savings account. Banks lately, in the past few decades, they have really gotten into the business of giving financial advice. They didn't used to be allowed to do that, but how they're able to do that now is they actually will take a financial advisor and they'll put them in the bank.

What happens is the tellers are actually trained to say, "Oh, Mr. and Ms. Jones have a CD that has come due, or maybe they have a lot of money in their savings account, or maybe they have a question on this or that." They're trained to actually send you over to the financial advisor.

One of the things that I see with advisors that work at banks is a lot of times they don't have as many options and as many products and tools in their toolbox as possible. Maybe they're a little limited in what they can offer. Banks do a lot of short-term annuities. They do a lot of different things, but typically they're a little bit constricted in what they're allowed to offer.

The next thing that I see a lot of, and most of our clients that have come from other firms come from this segment right here, it's called a wirehouse firm. It is the very large companies. If I listed them, they're the ones that you would know. They're the ones that you see on TV. They're the ones that have been around for a long time, and there's really only four or five main ones, but there's some offshoots. And what I see a lot is from those companies, there's a lot of proprietary products.

So if you are with Morgan Stanley and you bring a statement into my office, I can pretty well tell you, without knowing anything about you, what you're invested in, because I know what Morgan Stanley does. The same with Merrill Lynch; the same with UBS; the same with a lot of these big companies. They're using their own proprietary products. You can actually look on there and you can see the mutual funds, and the different funds and investments that you're invested in a lot of times will carry the same name as the company where your money is. And I'm of the mind that one company cannot be the best thing in every area.

The last segment of our industry is something called an independent space, or in my office, it's an independent fiduciary space. That's how we're set up, and we're actually partnered with a large company called Brookstone Capital Management. Brookstone was actually just last year listed as the fastest-growing registered investment advisor in the country. They manage over $8 billion, and we are one of the offices that's decided to partner with them, and they do a lot for us. They do a lot of help with compliance, with asset management, with trading, and a lot of the things that are very expensive and you have to have a very large company behind you like a bank or a large wirehouse firm. This independent relationship we have with Brookstone helps us.

One of the main important things, the reason why I chose to partner with them in my business, is because they actually give us access to pretty much any financial tool in the industry. There are no proprietary products; there's no sales quotas; there's no one ever that tells me that I have to offer my client XYZ fund or ABC stock. That just doesn't happen in my business.

And so our relationship with Brookstone allows us to be an independent fiduciary, but allows us to have all the tools available more so even than you would find in any other place. So I think it gives us the best of both worlds. So go ahead and subscribe, and reach out and I will help you in any way possible.

Financial Advisors
Financial Advisors

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