SEC Registered Broker-Dealers

A broker is defined as anyone who makes securities transactions for others.  The exception to this is a bank.  A dealer is defined as someone who buys and sells securities for their own account, through a broker or otherwise.
Most entrepreneurs are looking for start-up capital and expect someone else to raise capital for them on a straight commission, with no up-front fees.
 
Only SEC/NASD registered broker dealers, and Bone Fide employees, can legally solicit/sell securities for a company on straight commission, with no up-front fees.  They always charge a potential company an up-front retainer, sometimes called due-diligence fees, before commencing.  This fluctuates anywhere from $35,000 to $100,000, depending on the complexity of the transactions.  Most SEC brokers/dealers avoid start-up and early stage companies.  A Bona Fide employee cannot be paid commissions from the sale of securities.

“Associated persons” (employees or independent contractors) work for a registered broker-dealer. They may also be called “stock brokers” or “registered representatives” who do not have to register separately with SEC.  They must be supervised by a currently registered broker-dealer. It may be advisable for them to register with self-regulatory organizations of which their employer is a member — for example, NASD or a national securities exchange.
The investment advisor profession is regulated by the Investment Adviser Association (IAA) and National Regulatory Services.  On July 31, 2006 they found a 19.5% increase in the number of SEC – registered advisers. There were 2,423 registered hedge fund advisers who each registered at least one hedge fund client.  This number represented 23.6% of all SEC registered investment advisers who managed hedge funds worth $2.4 trillion.
  
A statistical report which gathered data from electronic filings by registered investment advisers with the Securities and Exchange Commission  (SEC) as of April 7, 2006, showed more than 75% of clients are hedge funds, dealing with 1,336 hedge fund firms, an increase from 1,092 firms previously registered.   Total assets managed (AUM) by SEC registered investment advisers totalled $31.4 trillion,  increased by 17.2% over 2005.