What is an RIA, and what makes one independent?
Short answer: A registered investment adviser (RIA) is a firm registered with the SEC or a state to give investment advice for a fee. RIAs owe clients a fiduciary duty. An independent RIA is one that is not owned by or part of a brokerage firm or bank, and typically holds client assets at a separate custodian. You can look up any RIA, its Form ADV and its disclosures on IAPD. Investor.gov’s RIA glossary entry has more.
RIA vs broker-dealer vs hybrid
| Independent RIA | Broker-dealer | Hybrid (dually registered) | |
|---|---|---|---|
| Registered with | SEC or state | SEC and FINRA | Both |
| Standard | Fiduciary duty | Regulation Best Interest on recommendations | Depends on the account |
| Usually paid by | Client fees | Commissions and fees | Both |
| Check on | IAPD | BrokerCheck | Both |
SEC or state registration?
Generally, larger advisers (by assets under management) register with the SEC and smaller ones with their state securities regulator. Either way, the firm files Form ADV, and its individual advisers are investment adviser representatives.
How do you look up an RIA?
- Search the firm and the person on IAPD.
- Open Form ADV Part 2A for services, fees, minimums and conflicts.
- Read Form CRS for a short summary.
- Check BrokerCheck too, in case they are also registered as a broker.
Get matched with a financial advisor
Answer three quick questions. We match you with advisors whose services and minimums fit.
Is an independent RIA right for you?
That depends on the services, fees and fit, not the business model alone. Compare any RIA with the steps in how to choose a financial advisor, and see independent RIA vs wirehouse vs bank advisor.
Frequently asked questions
What is an RIA?
A registered investment adviser: a firm registered with the SEC or a state that gives investment advice for a fee and owes clients a fiduciary duty.
What is an independent RIA?
An RIA that is not owned by or part of a brokerage firm or bank, and typically keeps client assets at a separate custodian.
What is the difference between an RIA and a broker-dealer?
RIAs give advice for a fee under a fiduciary duty. Broker-dealers execute trades and recommend products under Regulation Best Interest.
How do I check if a firm is an RIA?
Search it on the SEC's Investment Adviser Public Disclosure site, which shows registration and Form ADV.
Who holds my money at an RIA?
Usually a separate qualified custodian, such as a brokerage or bank, holds the assets; the RIA manages them.
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