What is a Registered Investment Advisor (RIA)?

A registered investment advisor (RIA) is a financial firm that advises clients on securities investments and may manage their investment portfolios. RIAs are registered with either the U.S. Securities and Exchange Commission (SEC) or state securities administrators.

RIAs and the people who work from them have fiduciary obligations to their clients, meaning that they have a fundamental duty to always and only provide investment advice that is in their client’s best interests.

Key Takeaways

• Registered investment advisors (RIAs) are financial firms which manage the assets of individual and institutional investors.

• RIAs must register with the U.S. Securities and Exchange Commission (SEC) 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 (AUM) by the RIA.

• Unlike broker-dealers, RIAs have a fiduciary duty to put the best interests of the client first.

• Investment advisor representatives (IARs) are the financial professionals who work for RIAs.

Source: Investopedia
Written By ADAM HAYES
Reviewed by MARGUERITA CHENG
Fact checked by RYAN EICHLER

Updated June 10, 2023