A registered investment adviser, or RIA, is a firm or person paid to give investment advice about securities that is registered with the SEC or with state securities authorities. RIAs owe clients a duty to act in the client's best interest. Registration is not an endorsement, so you still need to check the adviser's record and fees.
You have been referred to someone whose card says "wealth management" and "RIA." You are not sure what the label means, whether it is the same as a broker, or what you should ask before you hand over a statement. Those are the right questions to be asking first.
What is an investment adviser, in legal terms?
An investment adviser is a firm or person that, for compensation, is in the business of giving advice about investing in securities. Investor.gov, the SEC's investor education site, describes securities as stocks, bonds, mutual funds, ETFs and certain other products. The definition also covers issuing reports or analyses about securities as part of a regular business.
"Registered" means the firm or person has registered with the SEC or a state, as advisers generally must. The name on the door can vary: wealth manager, financial planner and portfolio manager are all just job titles. What matters is the legal status, which you can look up.
What does an RIA actually do?
Advisers typically provide ongoing advice about buying, selling or holding investments, and they monitor how those investments line up with your goals, according to Investor.gov. Some also advise on asset allocation, market trends or financial planning.
The usual payment is a fee based on the value of the assets in your account, though the amount and structure depend on the contract. You may pay other costs tied to servicing the account and the investments inside it. Our page on fee-only versus fee-based advisors explains how pay structures differ.
RIA vs broker: what is the difference?
The short version: advisers give ongoing advice for a fee and are required to act in your best interest, while brokers are in the business of buying and selling securities for customers. Many professionals are dually registered, so ask which role they are playing for each account.
| Investment adviser (RIA) | Broker-dealer representative | |
|---|---|---|
| Core business | Advice about securities | Buying and selling securities |
| Typical pay | Often a percentage of assets managed, or a flat or hourly fee | Often commissions or other transaction-based pay |
| Where to check | Investor.gov and the SEC's adviser search (IAPD) | FINRA BrokerCheck |
| Key disclosure | Form ADV and brochure | Form CRS relationship summary |
Investor.gov tells you to read the adviser's relationship summary along with its Form ADV Part 2 brochure before you sign anything. Our guide to what a fiduciary financial advisor is goes deeper on the best-interest duty.
How do you check whether an adviser is registered?
Search for both the person and the firm, since Investor.gov advises checking out both. The Investment Adviser Public Disclosure site, called IAPD, is the SEC's free search tool. It shows whether an adviser is registered and whether the firm or individual has had run-ins with regulators or complaints from investors.
Step 1: Search the SEC's adviser database
Go to the SEC's adviser search and type the individual's name and the firm name. Confirm that the registration status, state and firm match what you were told.
Step 2: Read the Form ADV brochure
Ask for the firm's latest Form ADV, including the brochure and brochure supplement, as Investor.gov recommends. The brochure explains services, fees and conflicts of interest in plain language.
Step 3: Look for disciplinary history
Read any disclosures about regulatory actions, customer complaints or legal matters. One old complaint does not decide the question, but a pattern or an unexplained history deserves a direct question to the adviser.
Step 4: Cross-check the broker side
If the person is also a broker, look them up on BrokerCheck. Our walkthrough on how to check a financial advisor on BrokerCheck shows each field.
What should you ask before hiring an RIA?
Investor.gov lists questions worth asking, including these:
- Are you registered with the SEC, a state or FINRA?
- May I have a copy of your firm's latest Form ADV, including the brochure?
- Have you or your firm ever been disciplined by any regulator?
- How are you paid, whether by hourly rate, flat fee or commission?
- What experience do you have with people in my circumstances?
- Are you limited in the products you can recommend, and if so, why?
Investor.gov also lists seven things to consider before choosing: the services you need, the services the adviser can provide, limits on those services, what you will pay, how the adviser is paid, the adviser's conflicts of interest, and any legal or disciplinary history.
What are the limits of registration?
Registration means the adviser is subject to oversight and disclosure rules. It does not mean the SEC has reviewed or approved the adviser's advice, and it does not protect you from investment losses. Investor.gov notes that the way advisers make money creates some conflicts with your interests, so ask about them. For a full process, see how to choose a financial advisor.
Frequently asked questions
Is an RIA the same as a financial advisor?
Not necessarily. "Financial advisor" is a general job title, while "registered investment adviser" is a legal status. Check how the individual and their firm are registered rather than relying on the title.
Is an RIA a fiduciary?
Yes. Investor.gov says investment advisers are required to act in your best interest and not put their interest ahead of yours. A fiduciary duty does not remove conflicts of interest, so you should still ask about them.
Where do I look up an RIA?
Use the free adviser search on Investor.gov, which links to the SEC's IAPD database. Search for the individual and the firm separately.
Do all advisers register with the SEC?
No. Investor.gov says advisers generally must register with the SEC or state securities authorities. Which one applies depends on the firm, so the IAPD record will show where it is registered.
Related: What is a fiduciary financial advisor? · How to check a financial advisor on BrokerCheck · How to choose a financial advisor