Consultant, advisor, or independent agent: understand who works for whom

These three terms are often used interchangeably in the Brazilian market, but they describe opposing positions. One represents the investor. Another represents the person selling the product. And the third ceased to exist in 2023. Understanding this difference is the first step before making any decision about where to allocate your capital.

a. The term that disappeared

The independent investment agent no longer exists as a regulatory category. CVM Resolution 178, published in February 2023 and in effect since June of that year, revoked CVM Resolution 16 and replaced the designation with investment advisor. Anyone still presenting themselves as an independent agent is using retired terminology; while not an irregularity, it says something about how closely they follow their own regulations.

b. Opposite sides of the same table

The distinction between the two remaining figures is not about qualifications or the size of the firm. It is about their contractual position.

The investment advisor, regulated by CVM Resolution 178, acts as an agent for one or more intermediaries, such as brokerage firms and distributors. They are hired by them, paid by them, and the intermediary is responsible for their actions toward the client.

The securities consultant, regulated by CVM Resolution 19 of 2021, has a direct contractual relationship with the investor and is compensated exclusively by them.

In January 2026, the Superintendence of Institutional Investor Supervision published CVM/SIN Circular Letter 2/2026 and defined the difference with precision unusual for a regulatory document: the consultant is part of the buy-side, representing the investor; the advisor is part of the sell-side, acting as an agent for distributors.

Buyer and seller. The same table, opposite sides.

c. Who pays whom

This is the question that organizes everything else, and it is almost never asked.

The advisor receives a commission on the products they distribute. The brokerage firm pays the office, the office pays the advisor, and the source of this money is the fee embedded in the product you purchased. You pay it, but you don't see the line item on your statement.

The consultant receives a pre-agreed fee from the client. If they receive any payment from issuers or distributors, that amount must be passed on in full to the investor, by way of a discount on the contracted fee. The 2026 Circular Letter reinforces that their conduct must be guided by independence from both parties.

And here is the point that is usually treated with excessive delicacy: conflict of interest is not a flaw in the commission-based model; it is the design of it. When two products serve the client's objective equally well and one of them pays double, there is an economic incentive for the recommendation to lean that way. Not because the professional is dishonest, but because that is how the compensation system was built. The model does not ask for good faith; it demands it as compensation for a design that works against it.

d. "My advisor doesn't charge me anything"

They do. The charge just doesn't pass through your checking account.

It was to make this visible that the CVM issued Resolution 179, published alongside 178. It imposes an obligation on intermediaries to maintain on their website a description of the forms of compensation for the offering of securities and potential conflicts of interest, and to send the client a quarterly statement with the amounts actually received due to that client's investments during the period. The transparency rules became fully enforceable as of November 2024.

Resolution 178 adds one more piece: the advisor must provide the investor with a acknowledgment form, as provided for in Annex A of the regulation, detailing your activities, your compensation structure, and potential conflicts of interest.

If you have never read this document, it exists. If you have never received your quarterly statement, it should be on its way. It is worth requesting both and noting how long it takes to receive a response.

e. What the rest of the world did with this model

Brazil chose transparency. Several mature markets chose prohibition.

In the United Kingdom, the Retail Distribution Review came into effect at the end of 2012 and banned the payment of commissions from product manufacturers to advisors and platforms for retail investment advice. The Netherlands adopted an equivalent ban in 2013. In Australia, legislation known as the Future of Financial Advice prohibited conflicted remuneration. In the European Union, MiFID II banned the receipt of commissions by those presenting themselves as independent advisors.

The results have been measured. A study commissioned by the British regulator in 2014 indicated that the ban reduced conflicts of interest and significantly decreased product bias: sales of instruments that paid high commissions—some as high as 7.5% of the invested amount—fell, while recommendations for low-cost products rose.

In other words: when the commission was removed from the equation, the recommendation changed. This is the most telling data on the subject, as it does not rely on anyone's opinion. It measures behavior before and after.

f. What each party can and cannot do

Here, the boundaries are strict, and much of the market confusion stems from ignoring them.

Neither party executes orders on their own. CVM/SIN Circular Letter 2/2026 states that the decision and final order regarding the investment of funds subject to the recommendation are always, exclusively, and necessarily the investor's.

Neither of them accesses your account to trade. Deciding and executing on behalf of the client is portfolio management, an activity that requires its own specific registration.

An investment advisor cannot simultaneously act as a consultant. CVM Resolution 178 stipulates, in Article 7, paragraph 2, that an advisor registered to perform portfolio management, consulting, or securities analysis must first request the cancellation of their advisor accreditation. The same professional cannot wear both hats at the same time, and this is not just bureaucratic red tape: it is the regulatory recognition that representing the buyer and representing the seller are incompatible functions.

The consultant recommends specific assets. There is no prohibition against recommendation reports that identify assets, reference prices, and other operational parameters, provided they are objective and formalized. What the regulation requires is independence in forming that recommendation, not vagueness.

g. Consulting is not management

The asset manager decides and executes within the mandate they have received, and you hand over the decision-making. The consultant analyzes, recommends, and provides the rationale, while you retain the decision-making power and custody at the institution of your choice. These are distinct activities with distinct registrations and distinct responsibilities.

h. How to verify if someone is a CVM-registered consultant

In three minutes, without intermediaries.

The CVM maintains a public registry of securities consultants, searchable by name or CNPJ, on the gov.br/cvm portal. Authorization is individual for natural persons and specific for legal entities, so it is worth checking both: the professional and the company they represent.

If the name does not appear, the conversation is over before it even begins.

i. Four signs of conflict worth watching for

The recommendation comes before the diagnosis. Anyone who suggests a product in the first meeting, without having analyzed your obligations, time horizons, liquidity needs, and goals, is offering what they have, not what actually serves you.

The recommended portfolio is almost entirely in-house. Funds from the same institution, structured products issued by the group, pension plans from the same bank. Coincidence is possible. A pattern is an answer.

You don't know how much you're paying. If the question "how much does this investment pay the person who recommended it to me" doesn't have an immediate answer, the information exists and is being withheld.

The activity is frequent and poorly explained. Portfolio turnover generates revenue for the distributor. Not every trade is unjustified, but every trade should have a written justification.

j. Is it worth paying for something the bank offers for free?

The right question is different: is it worth receiving something for free that costs more than you imagine?

Bank service is not free. It is paid for internally, via spread, management fees, distribution commissions, and rebates. The difference between this model and direct advisory fees isn't about whether you pay or not, it's about knowing how much, to whom, and for what recommendation.

There is a silent effect to this. Invisible costs are never compared. Explicit costs are measured against results. That is why the transparency imposed by Resolution 179 shifts the discussion: the moment an investor can see how much they are paying for distribution, the price of independence no longer seems expensive—it simply becomes comparable.

k. What remains

The vocabulary changed in 2023, and much of the market has yet to update its narrative. But the fundamental distinction predates the regulation and survives it: there are those who are paid to sell and those who are paid to recommend.

Both models are regulated and supervised in Brazil. However, the commission-based compensation of one of them has been banned in markets that faced the same problem and concluded that transparency does not fix misaligned incentives.

This is the cheapest and most valuable piece of information in the relationship.

If you want to understand how a recommendation built without a product shelf and without commissions works, learn about our Investment Advisory.

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