Registered Investment Advisor Firm (RIA)

What Is a Registered Investment Advisor (RIA)?

A registered investment advisor (RIA) is a financial professional firm that advises clients on securities investments and may manage their financial portfolios. RIAs are registered with either the Securities and Exchange Commission (SEC) or state securities administrators. RIAs have fiduciary obligations to their clients, which means they have a fundamental duty to always and only provide investment advice that is in the best interests of their clients.

 

Key Takeaways

• Registered investment advisors are financial firms that manage the assets of individual and institutional investors.
• RIAs must register with the U.S. Securities and Exchange Commission or a state regulatory agency, depending on the value of assets under the RIA’s management.
• RIAs typically earn their income through management fees, calculated as a percentage of a client’s assets under management by the RIA.
• Unlike broker-dealers, RIAs have a fiduciary duty to put the best interests of the client first.
• Investment advisor representatives are the financial professionals who work for RIAs.