Registered Investment Advisor - RIA


DEFINITION of 'Registered Investment Advisor - RIA'

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.

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