Can a financial advisor give money to a client?

No Employee may give or accept gifts in cash or cash equivalents to or from Customers, brokers, vendors or other persons doing business with the Company. Any request for gifts or gratuities is unprofessional and strictly prohibited. Based on the eligibility standard, financial advisors usually work on a commission basis for the products they sell to customers. This means that the client may never receive an invoice from the financial advisor.

On the other hand, they could end up with financial products that charge higher fees than other similar products in the market. These same financial products can earn the advisor a high commission. Do not give false or misleading information. Above all, don't steal or “borrow your customers' money.

All of these practices are standard protocols for financial advisors. However, there are less obvious guidelines you must adhere to to avoid being sued as a financial advisor. Advisors often offer thank you gifts to customers, often during the holidays and an advisory client can reciprocate. However, the delivery of gifts, regardless of value or recipient, must be free from conflicts of interest, favoritism and lack any future obligations of the client or advisory representative.

The money may not be invested in a company, but rather used to pay the company's debts, or even the personal debts of the financial advisor. If they provide you with incomplete or inaccurate information, you may offer them incorrect or inaccurate financial advice. Under the rule, financial advisors have custody of clients' assets when they hold clients' funds “directly or indirectly” or have the “authority to obtain possession of them.” In addition to regular and ongoing meetings, it is important to consult with your financial advisor when you anticipate a significant change in your life that may affect your financial situation, such as getting married or divorced, adding a child to your family, buying or selling a home, changing jobs, or receiving a job promotion. Since some of the most common titles that advisors use, including the term financial advisor itself, are not tied to any specific credential, don't assume that someone who wears an official sounding title has specific training or credentials.

The behavior of financial markets is beyond the control of any adviser, and when even the best-built portfolio loses money, a struggling client can look for a scapegoat and a way to recover their losses by calling a lawyer and looking for a crime. Although some robo-advisors offer high-level financial planning services, most stand out for simple investment management. The initial assessment may also include an examination of other financial management topics, such as insurance issues and your tax situation. Many online financial advisors can put you in touch with an advisor with a top-tier credential, such as a certified financial planner.

Online financial planning advisors and services typically charge a fixed subscription fee, a percentage of your assets, or both. Choosing the right financial advisor for your situation is key, as this means you won't end up paying for services you don't need or working with an advisor who isn't right for your financial goals. For investors who work with financial advisors, there is a more specific fear that they will be taken advantage of and money stolen from them. A recent compliance action (here) highlights the importance of investment advisors adopting and following rules designed to prohibit inappropriate gifts to and from clients by advisory representatives.

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