Looking for professional investment advice can be confusing and frustrating. One of the biggest stumbling blocks is the array of titles used by financial-services professionals - such as "broker," "advisor," "financial planner," "coach" and so on. Traditionally, brokers sold stocks for a commission and advisors gave advice for a fee. These days, the lines between these positions has become increasingly blurred. There are brokers who provide excellent financial planning services and people calling themselves financial planners who do little more than sell stocks and bonds. But once you get beyond the titles, the real choice begins. Do you choose an advisor from a Wall Street firm or do you work with an independent advisor? Let's go over the differences and how they may affect your decision.

Wall Street
When most people think about investing, they think about Wall Street. It embodies globally recognized, brand-name investment firms that represent the mystique of rags-to-riches stories and paper fortunes won and lost. These big investment firms have deep pockets and impressive resources: big advertising budgets, big buildings and big marketing departments. They have thousands of employees, including research analysts and money managers - many of whom can be spotted on CNN and CNBC commenting on the latest happenings in the stock market.

Of course, big doesn't always mean better. Big companies are often impersonal. Employees come and go. Corporate mandates drive product sales decisions. The need to earn a quarterly profit to satisfy shareholders can translate into pressure to sell products, regardless of whether clients need those products. Proprietary products encourage conflicts of interest and huge numbers of brokers often translate into training programs geared to the lowest common denominator, resulting in cookie-cutter financial plans for all clients.

The consequence of becoming a large company is that smaller clients may get lost in the shuffle. Wall Street firms tend to overlook smaller clients and focus on their bigger clients who may have a net worth several times that of other customers. Losing one of these clients can seriously affect a broker's annual income. Also, many of the investment products that Wall Street offers - such as bonds, Treasury notes and private placements - are not even made available to small clients.

Because of all these drawbacks for the small investor, if you're growing a portfolio, you may want to look to where your money is appreciated.

Main Street

While you won't see them featured on CNN or sponsoring a major golf tournament, a wide variety of investment advisors can be found on "Main Street" in cities and towns all across the country. Many of these folks learned the trade on Wall Street, grew disenchanted and left. They rented an office, put up a sign and built their businesses with little or no help. These independent advisors (they are independent because they are self-employed) have the flexibility to choose the products they offer and the freedom to act unencumbered by corporate policies or the needs of shareholders. Independent advisors often offer an impressive level of personal service because they have a stake in the business. As a client, you work directly with the owner.

On the downside, independent advisors do not usually have much in the way of a name brand. While they have access to many of the same products and services that Wall Street firms offer, independent advisors access these products from service providers that many investors aren't likely to recognize. And there are some services that may simply not be available through independent advisors. Initial public offerings are one high-profile example. If you want consistent access to the stocks of these Wall Street darlings, you're likely to have trouble finding it on Main Street.

Finally, independent advisors aren't backed by the well-known resources that Wall Street firms offer. They don't have big budgets and marketing departments, and they may not even have a corporate brochure. The staff is likely to be quite small or even limited to a single person. Investors who are growing a moderate portfolio for retirement may feel more comfortable and get more personalized service from a smaller firm.

Wall Street or
Main Street: Questions to Ask
When you are contemplating whether to choose an advisor from either Wall Street or Main Street, there are a few key questions that will help with the evaluation:

How do you get paid?

Ask the advisor how he or she gets paid. Advisor compensation takes the form of commissions, a fee (either hourly or based on assets under management) or some combination of fees and commissions. With commissions, you pay only for what you buy. Of course, that means your advisor gets paid only if he or she sells you something, which raises a question about whether it is in your best interests to buy what your advisor is selling.

Fee-based advisors earn the same paycheck regardless of what you buy. Many investors feel that this aligns the interests of the advisor with the interest of the investors. On the downside, the fee that you pay may be higher than the cost of the commission for a similar amount of purchases.

What services do you offer?
Does your advisor specialize in retirement planning? Does he or she offer comprehensive financial planning? Is the practice a "family office," offering financial services that cater to families, such as financial education, household budgeting or estate planning? Compare the list of services that the advisor offers to the list of services that you need.

What products do you offer?
The financial services arena offers a host of products from mutual funds and individual securities (such as stock and bonds) to managed money, limited partnerships and insurance. Find out what the advisor that you are considering offers and compare those offers against your personal needs.

Does your practice specialize in a specific clientele?
Advisors structure their practices in a variety of ways. Some work with every client that walks through the door, while others work only with dentists, doctors or pilots. Some advisory practices specialize in meeting the needs of small business owners or employees of a particular company. Talk to your potential advisor about his or her area of expertise.

The Bottom Line
Regardless of whether you are leaning toward an advisor from Wall Street or Main Street, your interests will be best served if you ask a lot of questions and do a lot of listening and observing before you make a decision. If you sit down for a consultation, pay attention to what areas your consultation covers and whether your best interest is kept at the center of the discussion. Does your advisor ask the right questions or does he or she start off by trying to sell you a product? Do the tax ramifications of investing enter the discussion? Does the advisor explain his or her process? Remember, at the end of the day, the decision about whom to trust with your financial well-being should be based on what the advisor can do for you, not the name or location of the firm on the advisor's business card.

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