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independent financial advisor vs bank

Truist Wealth offers collaboration with a wealth management advisor to offer guidance Insights gives you access to the Truist Investment Advisory Group. Chapter 4: All you need to know before investing in Mutual Funds. 3. Importance of an Independent Financial Advisor. When investors look for assistance with. Types of financial adviser · independent financial advisers (IFAs) give unbiased advice about the whole range of financial products from all the different.

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"It's an important consideration," said Howard Pressman, a certified financial planner and partner at Egan, Berger & Weiner in Vienna, Virginia. "Many people don't want a firm so large that they can't get the personalized service and advice they deserve but [really small] practices might not have enough coverage to meet clients' needs."

Consumers face a dizzying array of choices when deciding who to enlist in their efforts to manage their financial lives. With varying degrees of education and professional credentials, some advisors might focus on investments or insurance, while others delve into areas like tax planning or college savings as part of their advice. On top of all that, they can work at companies ranging from a one- or two-person shop to a behemoth.

For example, Bank of America's wealth management unit – which includes Merrill Lynch and U.S. Trust – manages $2.6 trillion in client assets among a 16,400-strong army of advisors, according to its latest quarterly report. That contrasts with solo operators who work from home and manage a few million dollars. Then there's everything between the two extremes, making for an industry where thousands upon thousands of companies compete for investors' money.

If something happens to your advisor, you want to know there's a plan in place to make sure you're taken care of.
Wealth manager at Campbell Wealth Management

With smaller firms, the biggest benefit is how personal the relationship with your advisor can be and their ability to tailor their advice to your specific situation, industry observers say. There are other considerations, however.

If you're thinking about going with someone at a solo or very small operation, ask if he or she has a succession plan in place. That is, advisors should have formal arrangements detailing who would take over managing client assets and/or financial plans if they plan to retire or unexpected death or disability occurs.

"If something happens to your advisor, you want to know there's a plan in place to make sure you're taken care of," said CFP Evan Beach, a wealth manager at Campbell Wealth Management in Alexandria, Virginia.

Additionally, small firms tend to have fewer options for who's on call if your advisor goes dark.

"If an advisor goes on vacation or gets sick, there should be a backup system in place to cover that absence," said Christine Benz, director of personal finance for research firm Morningstar.

Another consideration is that small firms are less likely to have a wide range of expertise in-house and subsequently refer clients to external specialists (say, a trust attorney) as needed. While not necessarily a bad thing, it means "you just won't be able to walk down a hallway to find the expertise you need," Benz said.

If you're considering someone at a large firm, meanwhile, some advisors say it's worth asking how many clients the person has. While many companies have systems and protocols that allow their advisors to operate efficiently and serve a larger number of clients, there's still a limit to how lengthy that roster can get before you start feeling like a number.

Another consideration that goes with larger firms is their tendency to focus on asset growth instead of taking a holistic view of a person's financial situation.

"People need more help on the planning side than they do with investments," Benz said. "Larger firms disproportionately focus on the investment piece."

She said that advisors at larger firms also may be more restricted in what they can offer as investment choices.

People need more help on the planning side than they do with investments.
director of personal finance for Morningstar

"Smaller firms might have more flexibility to deal with the idiosyncrasies of your portfolio," Benz said. She added that at very large firms, advisors offering in-house investments is an arrangement that also creates the potential for conflicts of interest.

Although company size is only one aspect of choosing a financial advisor, it should help you make a choice you can feel good about.

"You can get whatever type of advisor you want," said Beach at Campbell Wealth Management. "You just have to be patient and talk to enough people to find that person."

Источник: https://www.cnbc.com/2017/07/31/its-small-vs-big-when-picking-an-advisor.html

A Financial Advisor’s Path to Independent Freedom

Photo courtesy of Shutterstock

One morning about 13 months ago, I was awakened early by several text messages from my colleagues about how the bank that I called home for the last seven years was getting bought out by one of our main competitors. In a strange twist of fate, the smaller bank I worked at, before joining my current bank team, was bought by this same competitor.

I was happy and didn’t have any plans of leaving, even after I got these texts. This was being publicized as a “merger of equals.” I didn’t panic as my financial advisement practice was in a good place and we were growing quickly. It felt different than the previous buyout I had been involved in.

Ad A

When my bank spoke with us about the merger later that day, leadership gushed about how it would be only positive for us advisors and our clients. However, it soon became evident that the main reasons I loved this bank were going to change drastically; segmentation was going to get stricter and the politics would become more dramatic, as is typical with larger firms. I began to think more proactively about what a better situation for my clients and our team would be.

A month later, we started to look at where we wanted to go. We knew the merger would happen sometime by the end of the year, and we needed to act fast. We quickly ruled out insurance channel firms, as I didn’t think you could act as a fiduciary when a firm has proprietary products. We also ruled out the RIA model because we were too small and needed to affiliate with a well-known firm. So, we started the search for our best option, picking between three firms for each category: the banks, wirehouse firms and independent broker dealers.

Ad B

The journey was exciting and extremely educational. It brought us to the independent channel after our research had concluded. However, it was by no means an easy decision, and we assessed a lot of factors to make an educated decision. These are the three options all financial advisors, like myself, should look into before taking the leap into independent practice.

Benefits of Banks

The bank channel is the top way to go to if you’re starting out as a financial advisor with limited or no clientele. You will get a sizable amount of referrals, plus you will be actively involved in branch trainings, giving back and ultimately doing the right thing for your clients.

There are several reasons for this. One is that the payouts are not far off from the wirehouse firms, whereas, in years past, banks paid a lot less. The referral opportunities are also great as the bankers have tremendous goals and incentives to get prospective clients in front of you. You really aren’t limited much in terms of “traditional” investment solutions. And then, there are those great signing bonuses banks offer to attract fresh talent.

In my case, the banks we looked at did have “broker protocol,” which allows you to solicit your clients from your previous firm. However, one did not, which made that option a lot less appealing.

There were other reasons why joining a traditional bank didn’t make sense for me. Over the last few years, bank channel opportunities to build a practice have really started to get depressed due to segmentation practices, payout compression and the ever-growing push to get assets to trust services. Trust services tend to have higher fees, and the bank keeps more of the revenue by assigning a trust investment associate instead of paying a higher percentage to an advisor. They also want a banker as the “lead” relationship for the client. The goal is to cross-sell more bank products, while also maintaining a higher retention percentage should the advisor leave the bank. You are treated as just another employee, so you are issued a W-2, not allowing for business creation or business expense write-offs.

While the traditional investment solutions are sound, banks generally feel very strongly about not allowing too many alternative investment options, since their priority tends to be banking services—not spending the costs on expanding their alternative platforms. They use the term “being conservative” as the reasoning for this. The bank channel is also more costly for clients, as they don’t allow for fee compression by penalizing advisors for discounting their clients.

If my practice hadn’t been big enough yet, this would have definitely been an option to consider, because there is no channel where you can receive more referrals. I knew the bank channel very well, and I knew I would do well there. But for me, the cons outweighed the pros at this stage of my career. The banks are best for smaller advisors or non-entrepreneurial advisors, whose practices tend to be transactional by nature.

Power of Wirehouse Firms

The wirehouse was always where I thought I would end up, when I did work in the bank channel. The classic names—UBS, Morgan Stanley, Merrill Lynch—were those I had always dreamed of on my business card. Those names add such credibility, I thought. This time, though, I considered a few important questions:

  • What’s the cost of what you’re giving up for that?
  • Was it more like the bank or more like going independent?
  • Do you receive referrals?

The upsides were very similar to the banks in some regards. First of all, the name is important because clients feel safe recognizing it. It also allowed us to be in charge of the client, while still having full banking services, and it had some great deferred compensation. If you were going to stay at the wirehouse for more than 20 years, the deferred comp could really grow. And the alternative selections were tremendous.

On the downside, solicitation of clients would have created liability, and most likely potential lawsuits, as many firms have left the broker protocol. The ability to move the book would have been heavily at risk. The payout percentage was the same as the banks, yet with no referral flow. As with the banks, you would be a W-2 employee, limiting your business creation and write-offs, and would have no input on your office setup. On top of all that, the banks actually had better solutions and less fee compression.

Overall, I didn’t find wirehouse firms any better than the banks and, in a lot of ways, worse. Not being involved in broker protocol was a huge negative, as I would be opening myself up for potential lawsuits. They also made their compensation difficult to understand with compensation plans changing yearly. While they really showed they wanted me to join, I couldn’t get concrete answers about payouts or what they would provide. It was a lot of “trust us”—which I learned in this business is a scary ask.

I initially had made up my mind to join them, but that quickly changed once I learned more about independence.

The Independent Channel

Independence. It sounds great, right? But what does that actually mean?

Early on, I had almost ruled out going independent; the wirehouse firms and banks had made independence sound so difficult and complex. During the process, I was sitting down with many firms, just wanting to choose a destination and be done with it. I figured, “Why not go out for one more meeting or two within the independent channel?” Coming from a marquee-name bank, I understood that the name of where I was going would be very important in order to make my clients comfortable with the move.

Other factors made the choice even more clear. Most importantly, you were free to do what you felt was in the best interest of your client. The firms were part of broker protocol making it easy to contact my clients. The payouts were basically double what the wirehouse firms and banks offered. (Although, you do have to pay for all of the office needs, such as rent, furniture, phones, TVs and services.) But the net amount after expenses was still 25 to 50 percent higher than the other channels. You could create your own business name, style, communications and everything in between.

If you are not a self-starter or entrepreneurial type, this might be the wrong path. But I saw all of this as positives. You also had full freedom on lowering fees, full exposure to all investment solutions and the ability to customize your platforms. In addition, you had a great compliance department that would do due diligence for your clients and help protect them, along with my own due diligence.

On the downside, the setup of the office and the initial decisions are tough, especially when you are under a time constraint. The marketing and creation take time. You also have to negotiate a lease, which is very different than a residential lease. Having people to call on who have been through this is recommended. All decisions fall on you. There is no deferred comp or 401(k) contributions, and health insurance is on you, too. You need to go out and shop for all of these services individually and this takes time.

I later learned that these issues were way overblown; I enlisted a payroll company that does almost everything, including my health insurance, payroll taxes, human resources, 401(k) setup, etc. My lease and other office expenses are on autopay. I truly enjoyed the process of customizing my office. There really isn’t anything you can’t offload, if you don’t want the responsibility.

Most importantly, when it comes to my clients, I love being able to charge them a lower fee, if appropriate, and not be restricted by what we can offer. It took me only two months to make my final decision to go independent amid the bank merger, but really, my choice was clear all along. And it turned out to be the best choice for me, my clients and my family.

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Источник: https://www.worth.com/a-financial-advisors-path-to-independent-freedom/

It's small vs. big when picking an advisor

When it comes to choosing a financial advisor, one consideration is whether to go with someone at a large, well-branded company or a small shop. Does the size of the firm really make a difference if you like the person?

It sure can, according to industry insiders.

Advisors who have worked at both small and large companies say that, in general, the differences often boil down to the depth of the relationship and range of services offered.

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Why work with a financial advisor?

You work hard for what you earn — and want to do all you can to make sure you save and invest wisely. A financial advisor can help you achieve your short, and long-term financial goals, whether you have one or many, as well as plan and prepare for unexpected events that might arise. Through an ongoing, collaborative relationship with an advisor, plus secure anytime–access to your accounts online, you can track your progress toward your goals anytime and receive timely advice when you need it.

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We care about what matters most to you. That’s why we’ve established a relationship with Teresa Turner and Timothy Wakefield, who dedicate their practice to helping you achieve your financial goals. Together, you and your advisor will evaluate your financial life to see how it all fits. From there, your advisor will work with you to address key needs, consider tax strategies and find ways to help fill any gaps that could keep you from achieving the lifestyle you want. Through personalized financial advice, your advisor will help you prioritize what’s important today, while planning for a confident financial future.

Solutions and advice aligned to your goals

The Ameriprise Financial Institutions Group program allows us to align with the expertise and resources of Ameriprise Financial. You will have access to wide-ranging advice — from point-in-time investment recommendations and asset allocation strategies, to a comprehensive financial planning approach that covers key aspects of your financial life — to help you meet your goals. And, your advisor can provide access to a broad array of solutions to meet your specific needs, including investments, insurance and annuities, personal trust services, cash and cards.


About Ameriprise Financial

For more than 125 years, Ameriprise has remained true to its vision of putting its clients' interests first. Ameriprise is passionate about helping clients live the full and rich life they’ve earned, today, tomorrow and in the future. Ameriprise has helped millions of people invest billions of dollars for what's important to them. Today, Ameriprise is a leading global financial institution, with more than $900 billion in assets under management and administration.

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It's small vs. big when picking an advisor

When it comes to choosing a financial advisor, one consideration is whether to go with someone at a large, well-branded company or a small shop. Does the size of the firm really make a difference if you like the person?

It sure can, according to industry insiders.

Advisors who have worked at both small and large companies say that, in general, the differences often boil down to the depth of the relationship and range of services offered.

John Wildgoose May Go Down in Value

References to financial institutions are solely to indicate location. Any financial institution referenced is not affiliated with Ameriprise Financial, Inc. The Confident Retirement® approach is not a guarantee of future financial results. Ameriprise Financial Planning Services are optional, offered separately, and priced according to the complexity of your case and your financial advisor’s practice fee schedule. Your fees and financial advisor may independent financial advisor vs bank subject to change. Investing involves risks, including changes in value and possible loss of the entire amount invested. Ameriprise Financial, Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation. Investment advisory products and services are made available through Ameriprise Financial Services, Pay verizon bill online for someone else, a registered investment adviser. 

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Источник: https://www.bibank.com/bank-independent/wealth-management

A Financial Advisor’s Path to Independent Freedom

Photo courtesy of Shutterstock

One morning about 13 months ago, I was awakened early by several text messages from my colleagues about how the bank that I called home for the last seven years was getting bought out by one of our main competitors. In a strange twist of fate, the smaller bank I worked at, before joining my current bank team, was bought by this same competitor.

I was happy and didn’t have any plans of leaving, even after I got these texts. This was being publicized as a “merger of equals.” I didn’t panic as my financial advisement practice was in a good place and we were growing quickly. It felt different than the previous buyout I had been involved in.

Ad A

When my bank spoke with us about the merger later that day, leadership gushed about how it would be only positive for us advisors and our clients. However, it soon became evident that the main reasons I loved this bank were going to change drastically; segmentation was going to get stricter and the politics would become more dramatic, as is typical with larger firms. I began to think more proactively about what a better situation for my clients and our team would be.

A month later, we started to look at where we wanted to go. We knew the merger would happen sometime by the end of the year, and we needed to act fast. We quickly ruled out insurance channel firms, as I didn’t think you could act as a fiduciary when a firm has proprietary products. We also ruled out the RIA model because we were too small and needed to affiliate with a well-known firm. So, we started the search for our best option, picking between three firms for each category: the banks, wirehouse firms and independent broker dealers.

Ad B

The journey was exciting and extremely educational. It brought us to the independent independent financial advisor vs bank after independent financial advisor vs bank research had concluded. However, it was by no means an easy decision, and we assessed a lot of factors to make an educated decision. These are the three options all financial advisors, like myself, should look into before taking the leap into independent practice.

Benefits of Banks

The bank channel is the top way to go to if you’re starting out as a financial advisor with limited or no clientele. You will get a sizable amount of referrals, plus you will be actively involved in branch trainings, giving back and ultimately doing the right thing for your clients.

There are several reasons for this. One is that the payouts are not far off from the wirehouse firms, whereas, in years past, banks paid a lot less. The referral opportunities are also great as the bankers have tremendous goals and incentives to get prospective clients in front of you. You really aren’t limited much in terms of “traditional” investment solutions. And then, there are those great signing bonuses banks offer to attract fresh talent.

In my case, the banks we looked at did have “broker protocol,” which allows you to solicit your clients from your previous firm. However, one did not, which made that option a lot less appealing.

There were other reasons why joining a traditional bank didn’t make sense for me. Over the last few years, bank channel opportunities to build a practice have really started to get depressed due to segmentation practices, payout compression and the ever-growing push to get assets to trust services. Trust services tend to have higher fees, and the bank keeps more of the revenue by assigning a trust investment associate instead of paying a higher percentage to an advisor. They also want a banker as the “lead” relationship for the client. The goal is to cross-sell more bank products, while also maintaining a higher retention percentage should the advisor leave the bank. You are treated as just another employee, so you are issued a W-2, not allowing for business creation or business expense write-offs.

While the traditional investment solutions are sound, banks generally feel very strongly about not allowing too many alternative investment options, since their priority tends to be banking services—not spending the costs on expanding their alternative platforms. They use the term “being conservative” as the reasoning for this. The bank channel is also more costly for clients, as they don’t allow for fee compression by penalizing advisors for discounting their clients.

If my practice hadn’t been big enough yet, this would have definitely been an option to consider, because there is no channel where you can receive more referrals. I knew the bank channel very well, and I knew I would do well there. But for me, the cons outweighed the pros at this discover online banking bonus of my career. The banks are best for smaller advisors or non-entrepreneurial advisors, whose practices tend to be transactional by nature.

Power of Wirehouse Firms

The wirehouse was always where I thought I would end up, when I did work in the bank channel. The classic names—UBS, Morgan Stanley, Merrill Lynch—were those I had always dreamed of on my business card. Those names add such credibility, I thought. This time, though, I considered a few important questions:

  • What’s the cost of what you’re giving up for that?
  • Was it more like the bank or more like going independent?
  • Do you receive referrals?

The upsides were very similar to the banks in some regards. First of all, the name is important because clients feel safe recognizing it. It also allowed us to be in charge of the client, while still having full banking services, and it had some great deferred compensation. If you were going to stay at the wirehouse for more than 20 years, the deferred comp could really grow. And the alternative selections were tremendous.

On the downside, solicitation of clients would have created liability, and most likely potential lawsuits, as many firms have left the broker protocol. The ability to move the book would have been heavily at risk. The payout percentage was the same as the banks, yet with no referral flow. As with the banks, you would be a W-2 employee, limiting your business creation and write-offs, and would have no input on your office setup. On top of all that, the banks actually had better solutions and less fee compression.

Overall, I didn’t find wirehouse firms any better than the banks and, in a lot of ways, worse. Not being involved in broker protocol was a huge negative, as I would be opening myself up for potential lawsuits. They also made their compensation difficult to understand with compensation plans changing yearly. While they really showed they wanted me to join, I couldn’t get concrete answers about payouts or what they would provide. It was a lot of “trust us”—which I learned in this business is a scary ask.

I initially had made up my mind to join them, but that quickly changed once I learned more about independence.

The Independent Channel

Independence. It sounds great, right? But what does that actually mean?

Early on, I had almost ruled out going independent; the wirehouse firms and banks had made independence sound so difficult and complex. During the process, I was sitting down with many firms, just wanting to choose a destination and be done with it. I figured, “Why not go out for one more meeting or two within the independent channel?” Coming independent financial advisor vs bank a marquee-name bank, I understood that the name of where I was going would be very important in order to make my clients comfortable with the move.

Other factors made the choice even more clear. Most importantly, you were free to do what you felt was in the best interest of your client. The firms were part of broker protocol making it easy to contact my clients. The payouts were basically double what the wirehouse firms and banks offered. (Although, you do have independent financial advisor vs bank pay for all of the office needs, such as rent, furniture, phones, TVs and services.) But the net amount after expenses was still 25 to 50 percent higher than the other channels. You could create your own business name, style, communications and everything in between.

If you are not a self-starter or entrepreneurial type, this might be the wrong path. But I saw all of this as positives. You also had full freedom on lowering fees, full exposure to all investment solutions and the ability to customize your platforms. In addition, you had a great compliance department that would do due diligence for your clients and help protect them, along with my own due diligence.

On the downside, the setup of the office and the initial decisions are tough, especially when you are under a time constraint. The marketing and creation take time. You also have to negotiate a lease, which is very different than a residential lease. Having people to call on who have been through this is recommended. All decisions fall on you. There is no deferred comp or 401(k) contributions, and health insurance is on you, too. You need to go out and shop for all of these services individually and this takes time.

I later learned that these issues were way overblown; I enlisted a payroll company that does almost everything, including my health insurance, payroll taxes, human resources, 401(k) setup, etc. My lease and other office expenses are on autopay. I truly enjoyed the process of customizing my office. There really isn’t anything you can’t offload, if you don’t want the responsibility.

Most importantly, when it comes to my clients, I love being able to charge them a lower fee, if appropriate, and not be restricted by what we can offer. It took me only two months to make my final decision to go independent amid the bank merger, but really, my choice was clear all along. And it turned out to be the best choice for me, my clients and my family.

Worth KnowingWorth Weekly

An indispensable guide to finance, investing and entrepreneurship.

Frequency: Weekly

See all newsletters
Источник: https://www.worth.com/a-financial-advisors-path-to-independent-freedom/

Financial Advisors Vs. Investment Bankers

By Tom Gresham

Financial advisors help families manage their finances.

Financial advisors and investment bankers both play substantial roles in the U.S. financial system. Financial advisors' clients independent financial advisor vs bank are individuals or couples, whom they help with their personal finances. Investment bankers work more often with corporate clients, providing guidance and support for certain types of transactions. Financial advisors work in a variety of settings, and approximately 25 percent of them are self-employed, according to the Bureau of Labor Statistics. Investment bankers mostly work in commercial and investment banks.

Financial Advisors' Role

Financial advisors work with their individual clients to examine their financial strengths and weaknesses and to develop short-term and long-term first bank woodbury tn. They also offer guidance on the best strategies for meeting those goals and independent financial advisor vs bank pitfalls. Once first national bank severna park strategy is in place, financial advisors help their clients execute their plans. Financial advisors must have extensive knowledge in areas such as investing, retirement planning, higher education planning, taxes and insurance. They must be prepared to meet with clients regularly and to change course as the clients' financial situations and needs change over time. Financial advisors in firms often work closely with financial analysts, who research investment opportunities and provide recommendations on those opportunities.

Investment Bankers' Role

A central service that investment bankers provide is underwriting for new issues of stocks and bonds. For example, they help companies that are preparing initial public offerings of stock. In these offerings, investment bankers determine the company's worth, confirm that it qualifies to be publicly traded, purchase the shares of stock at a discount and then sell the shares at the IPO price to interested investors, including both institutions and individuals. The other major role that investment bankers play in financial markets is working with companies that are merging or being bought or sold. In these deals, investment bankers evaluate the financial and operational components of the companies involved and help develop and consider the terms of the deals.

Education

Financial advisors and investment bankers follow similar educational trajectories. Both need bachelor's degrees to break into the field, and they often acquire degrees in business-related majors, such as finance, economics and accounting. Workers in both careers also frequently pursue a Master of Business Administration degree, either after acquiring their bachelor's degree or after first working in their chosen field, because it provides chime bank customer service training, attracts clients and improves advancement opportunities.

Licenses and Certification

Financial advisors need certain licenses depending on the services they provide, such as selling insurance products. Many financial planners choose to seek the professional credential of Certified Financial Planner, which requires a bachelor's degree, three years of relevant work experience and a passing score on a wide-ranging exam that touches on a number independent financial advisor vs bank financial topics, such as taxes, insurance, investments and statistical modeling. Investment bankers must pass a series of exams to register with the Financial Industry Regulatory Authority. These exams cover topics such as the collection, analysis and evaluation of financial data; underwriting and financing transactions, offerings and registration of securities; mergers and acquisitions, tender offers and financial restructuring transactions; and general securities industry regulations.

Income

On average, both financial advisors and investment hotels near university at buffalo enjoy healthy incomes. Financial advisors earned a mean annual wage of $90,900 in 2011, according to the Bureau of Labor Statistics. Meanwhile, securities, commodities and financial services sales agents -- a category that includes investment bankers -- earned a mean annual wage of $98,810 that year. In both fields, there's a steep climb from the median earners to the highest ones. For instance, annual income for financial advisors jumps from $66,580 for those in the 50th percentile of earnings to $111,880 for those in the 75th percentile. Likewise, annual income for securities, commodities and financial services sales agents climbs sharply from $72,060 for those in the 50th percentile to $132,040 in the 75th percentile.

References

Writer Bio

Tom Gresham is a freelance writer and public relations specialist who has been writing professionally since 1999. His articles have appeared in "The Washington Post," "Virginia Magazine," "Vermont Magazine," "Adirondack Life" and the "Southern Arts Journal," among other publications. He graduated from the University of Virginia.

Источник: https://work.chron.com/financial-advisors-vs-investment-bankers-8502.html
independent financial advisor vs bank

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