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What is an RIA?
A registered investment advisor (RIA) is a professional advisory firm that offers personalized financial advice to its clients, many of whom are affluent.
• Many independent RIAs work with complex portfolios and address unique needs that require a highly customized level of investment management strategy and consultation.
• Many independent RIAs are owned by the individual advisors who run them.
• Many independent RIAs provide advice and services for a fee based on a percentage of the client’s assets.
• RIA firms are registered with the Securities and Exchange Commission or state securities regulators, are subject to the Investment Advisers Act of 1940, and have a fiduciary duty to act in the best interest of their clients.
Why might an independent RIA be a good choice for an investor?
• Independent RIAs generally have affiliations with a variety of firms who assist with tax planning, estate planning, money management and more. These affiliations allow them to help their clients with complex financial needs.
• An independent RIA’s affiliations generally make available a wide universe of products and services to them, so that an RIA can tailor solutions to an individual client’s goals.
• Some independent RIAs’ compensation is directly related to growing their clients’ assets, which can benefit both the advisor and client alike.
Visit: www.riastandsforyou.com for more information.
1 Get advice based on what’s best for you.
Whether it’s your retirement planning, tax situation, estate planning or assets at multiple places, it’s fundamentally important that your advisor truly understand you, your goals and your situation. Many independent registered investment advisors (RIAs) are in a position to do that and pride themselves on strong personal interaction with their clients and dedication to their needs. They believe that their independence is key to offering investment advice based on what’s best for their clients.
2 Understand exactly what you’re paying for.
Independent RIAs typically charge a fee based on a percentage of total assets managed. This fee structure may have advantages. It’s simple and easy to understand, helping to avoid surprises. It also gives your advisor an incentive to grow your assets—when you succeed, your advisor succeeds.
3 Get advice for your complex needs.
Many independent RIAs provide services that address a variety of complex investment needs that often arise when you accumulate significant wealth, such as assisting you with the sale of a business, complicated tax situations, trusts and intergenerational issues. Some advisors are specialists in certain investment strategies. Others can assist you with comprehensive services, such as estate planning or borrowing. Given the rich diversity of specialization throughout the industry, no matter how complex your individual needs, you will likely find an independent RIA who can provide advice that’s right for you.
4 Enjoy a different kind of relationship.
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 RIAs are entrepreneurial business owners, the buck stops with them, so to speak, and they frequently have a strong sense of personal accountability to their clients.
5 Know where your money is held.
RIAs typically use institutional custodians—generally large brokerage firms or banks—to hold and safeguard their clients’ stocks, mutual funds and other assets. These custodians also provide important infrastructure services such as executing trades and preparing monthly brokerage statements for clients. This helps an RIA focus on understanding your needs and providing the best advice possible.
This content is made available by Charles Schwab & Co., Inc. for educational purposes only.
This is not a solicitation nor recommendation to buy or sell a securities nor to imply any tax or legal advice, always seek a registered investment advisor to attain your risk/averse attitude and investment suitability before investing. All information is considered accurate and reliable, however, due to changing market, economic, taxation, institutional, and other pertinent potential cycles and variations, future results cannot be guaranteed by past performance and should be monitored on a continual periodic systematic basis to provide current advisory recommendations that meets the client short-term potential deviations and management disciplined style, while advisory provides solely long-term recommendations.
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