Why A Registered Investment Advisor?
RIA’s are investment advisory firms that agree to be regulated by the Securities and Exchange Commision or state agencies. As fiduciary under the Investment Advisory Act of 1940 they operate under a different and higher standard of responsibility to their clients than any other type of investment advisor.
RIA’s are legally obligated to act in their client’s best interests even if that runs counter to the firm’s best interests. In the typical Brokerage house arrangement a broker has a suitability standard to adhere to. As long as an investment is suitable for the client he/ she can sell it to the client. Wherereas in a fiducarity realtionship not only does that investment have to be suitable but it has to be the best fit and lowest cost. RIA’s are independent and fee based and therefore are not incetivized to sell borkerage products or create turnover in clients accounts.
Enjoy a higher standard.
The goal of an RIA is to help find solutions that are closely aligned with client needs and objectives, and many independent RIAs enjoy a deep, personal relationship with their clients. This often takes regular, ongoing interactions and because many independent RIA’s are entrepreneurial business owners, the buck stops with them and they frequently have a strong sense of personal accountability to their clients.