financial professional who specializes in making portfolio recommendations for clients. The advisor recommends a mix of investments (i.e., stocks, bonds, real estate) based on the particular needs of the client (i.e., tax rate, risk preferences, liquidity requirements). The investment advisor may also recommend specific companies in which to invest.
person or firm supplying buy-sell recommendations and market information to investment clients. Investment advisors are required to register with the Securities and Exchange Commission, and, under the Investment Advisors Act of 1940, disclose any conflicts of interest in recommendations they offer. In general, banks may give limited amounts of investment advice to retail customers, but there are few legal restrictions on investment advice to institutional accounts, such as pension funds, investment management firms and also corporate accounts.
Bank trust departments provide advice and make investments for pension and profit-sharing plans, individual estates, and others. Banks are also active as investment advisors for open-end investment companies -mutual funds-sold to retail and institutional investors, making investment recommendations and managing the securities held in a mutual fund's portfolio.
