Registered Investment Advisor - RIA

What is a 'Registered Investment Advisor - RIA'

A Registered Investment Advisor (RIA) is an advisor or firm engaged in the investment advisory business and registered either with the Securities and Exchange Commission (SEC) or state securities authorities. A Registered Investment Advisor is defined by The Investment Advisers Act of 1940 as a "person or firm that, for compensation, is engaged in the act of providing advice, making recommendations, issuing reports or furnishing analyses on securities, either directly or through publications." An investment advisor has a fiduciary duty to his or her clients, which means that he or she has a fundamental obligation to provide suitable investment advice and always act in the clients' best interests.

BREAKING DOWN 'Registered Investment Advisor - RIA'

In general, only larger advisors that have at least $25 million in assets under management or that provide advice to investment company clients are permitted to register with the SEC, while smaller advisors are required to register with state securities authorities.

Registration of an investment advisor is not meant to denote any form of recommendation or endorsement by the SEC or state securities regulators. It simply means that the investment advisor has fulfilled all the requirements for registration as an investment advisor.

In order to register with the SEC as an investment advisor, registrants must file Form ADV and keep it current by filing periodic amendments.

RELATED TERMS
  1. Investment Advisor

    As defined by the Investment Advisors Act of 1940, any person ...
  2. Federal Covered Advisor

    An investment advisor in the United States that manages more ...
  3. Fee-Based Investment

    An investment account in which the advisor's compensation is ...
  4. Financial Adviser

    A professional who helps individuals manage their finances by ...
  5. Investment Advisers Act of 194 ...

    A piece of legislation passed in 1940 that, among other things, ...
  6. Advisor

    1. The person or company responsible for making investments on ...
Related Articles
  1. Term

    What's an Investment Advisor?

    An investment or financial advisor makes investment recommendations and analyzes securities.
  2. Personal Finance

    RIAs and Brokers: What's the Difference?

    RIAs and brokers are held to different standards when providing investment advice. Here's how they differ.
  3. Investing Basics

    7 Steps To Evaluate A Financial Advisor

    Looking to hire a financial advisor but unsure what you want or need? Follow these seven steps.
  4. Financial Advisors

    Essential Questions for a Financial Advisor

    If you're a prospective financial advisor client (or an adviser), here are some questions you should ask ... and be prepared to answer.
  5. Investing Basics

    Investment Advisor Versus Broker: How They Compare

    What is the difference between an investment advisor and a broker?
  6. Personal Finance

    How Does Your Financial Advisor Get Paid?

    Some questions to ask your financial advisor about the recommendations they make and how they get paid.
  7. Investing Basics

    5 Things to Ask Before Hiring a Financial Advisor

    Choosing a financial advisor isn't an easy task. Here's a list of the most important things to consider when planning for your financial future.
  8. Personal Finance

    Should You Choose a Fee-only Financial Advisor?

    Is working with a fee-only financial advisor always your best option?
  9. Investing Basics

    Choosing the Right Financial Advisor

    The right financial advisor for one person may not be right for another.
  10. Financial Advisors

    Going Independent: What Advisors Should Expect

    Thinking of going independent with your financial advisory practice? Here are some things to consider.
RELATED FAQS
  1. Are hedge funds registered with the Securities and Exchange Commission (SEC)?

    Learn the conditions that require hedge fund advisors to register with the U.S. Securities and Exchange Commission. Read Answer >>
  2. Do financial advisors need to be approved by FINRA?

    Learn about whether a financial advisor may be required to be approved by FINRA, and what exams a financial advisor needs ... Read Answer >>
  3. Do financial advisors have a base salary?

    Find out how self-employed and corporate financial advisors make a living. Find out whether they get paid based on commission ... Read Answer >>
  4. What fees do financial advisors charge?

    Learn how much financial advisors charge clients; discover the various payment plans available to customers seeking financial ... Read Answer >>
  5. Why do financial advisors have a fiduciary responsibility?

    Find out why financial advisors have a fiduciary duty to their clients, including what fiduciary duty entails and an example ... Read Answer >>
  6. Do financial advisors work only in banks?

    Learn how financial advisors are employed not only by various financial institutions, such as banks, but an increasing number ... Read Answer >>
Hot Definitions
  1. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage ...
  2. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  3. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  4. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  5. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  6. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
Trading Center