What is a Registered Investment Advisor?

A registered investment advisor (RIA) manages the assets of their individual and institutional investors. They also provide planning and consulting services for their clients.

What Does an RIA Do?

Traditionally, RIAs create and manage investment portfolios using individual stocks, bonds and mutual funds. RIA firms can offer a full spectrum of investment opportunities for clients' portfolios. They generally utilize a mix of investments and services to best serve their clients. They may offer the services of other advisory firms for the management of a client’s assets or manage the assets themselves.

How is the RIA compensated for their services?

RIAs earn their revenue through various compensation structures. The most widely used method involves management fees comprised of a percentage of assets held for a client. This serves to align the best interests of the client with those of the RIA, as the advisor cannot earn additional fees on the assets unless the client’s asset base increases.