This is the Cato Daily Podcast for Thursday, May 2nd, 2004. I'm Caleb Brown.

Your Investment Advisor is supposed to work for you. A new regulatory push would put

investment advisors in the uncomfortable position of having to also adhere to

elements of the Bank Secrecy Act. So how might that compromise that relationship between advisor and client?

Cato's Jennifer Shelve explains some of the problems with the proposed regulations.

Jen, do you have an investment advisor? I do.

Okay.

So I have had investment advisors in the past and in part because I talked to you so often about topics like this,

I quickly am able to exhaust some of their knowledge about certain rules and regulations.

Broadly, what territory does investment advisor cover?

investment advisors per the definition,

provide investment advice.

They can do that in a whole lot of different ways,

and there's a lot of different types of investment advisors, but what is kind of important to distinguish

an investment advisor from another financial services provider is that investment advisors themselves don't hold your money.

When you work with an investment advisor, your money is held by a custodian.

And that custodian could be a bank, it could be a broker-dealer, but the investment

advisor's stock and trade is in the advice that they provide, not in the actual

moving of the money.

All right, so it's not like an accountant, it's not quite like a money manager, it's what you're

paying for when you pay an investment advisor is, tell me about the pitfalls in my portfolio.

Tell me about the problems you might foresee down the road for me investment wise.

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