Registered Investment Advisor
A Registered Investment Advisor (RIA) is a professional advisory firm that offers personalized investment advice, and may offer investment account management and financial planning. A Registered Investment Advisor is legally held to the highest fiduciary standard for their clients. A Registered Investment Advisor must always act in the best interest of their client and avoid or disclose any conflict of interest. Most RIA’s describe themselves as being a fee-only advisor. A registered investment advisor representative holds the Securities License 66 (or 63 and 65). An RIA representative may hold other securities licenses as well.
An RIA may charge an hourly fee, a percentage of the assets under management or other similar fees that does not directly depend on the investment decisions made by the client. This type of advice is non-conflicted.
Only registered investment advisers are permitted to give holistic advice, while brokers (stock brokers) are restricted to providing incidental advice, per the Securities and Exchange Commission. A Broker (stock broker) receives a commission or fee for placing trades in a client’s account. Advisors that work for a Broker-Dealer can give conflicted advice. Advisors that are employees of Broker-Dealers are under pressure to generate revenue for the Broker-Dealer, or risk loosing their job.
Another benefit of working with an RIA is that RIA’s are independent and can work with many investment companies to find the right investments for you at the best price. A Registered Investment Advisor is the quarterback for your financial life and will coordinate the execution and management of your financial plan with other financial professionals such as estate and trust attorneys and certified public accountants.
Our firm charges a fee for wealth management and financial planning. Occasionally, we may sell an insurance product which we do receive a commission in lieu of a fee. An insurance product is a life insurance policy, a long-term care insurance policy, or a fixed annuity. Please click on the document below: 5 Key Benefits of an RIA, from Charles Schwab for more information about a Registered Investment Advisor.