What Is a Registered Investment Advisor (RIA)?

Registered investment advisors (RIAs) provide personalized investment advice in return for a fee. They are regulated by the federal or state government.

Many titles that financial professionals use, such as “financial advisor,” “investment manager” or “wealth manager,” are not regulated. If you’re unsure, see if they are registered with the U.S. Securities and Exchange Commission (SEC) — the federal governing body that regulates RIAs — or with their state’s securities regulator.

Registered investment advisors vs. advisers

While “investment adviser” is the legal term used by the SEC, it is often spelled "advisor." Regardless of how it’s spelled, it’s best to double-check any advisor’s qualifications. One of the easiest ways to verify an advisor is with FINRA’s BrokerCheck tool. You can search for advisors by name, firm or location.

What can registered investment advisors do?

This varies by RIA, but for the most part, RIAs should be able to help you with the following:

• Investment advice: determining what to buy and sell, when and how much.

• Investment management: monitoring your investments, tracking their progress toward your goals and watching for signals to change course.

• Financial planning: creating a comprehensive set of goals and plans for your entire financial life, including retirement, college funding, major purchases or sales, life changes, business succession planning, medical events and other situations.

• Retirement planning: determining how much you need to retire, where the money will come from, how much to draw down each year in retirement and tax planning.

Some RIAs specialize in niche topics. If you’re looking for help in a particular area, make sure you ask any potential advisors about their experience in that topic. A few common niches include:

• Estate planning.

• Equity compensation including incentive stock options and restricted stock units (RSUs).

• Divorce.

• Building generational wealth.

• Cryptocurrency.

• Options, futures and other alternative investments.

• Financial planning as an immigrant or non-U.S. citizen.

• Tax strategy.

• Tax preparation.

Who regulates registered investment advisors?

Registered investment advisors are regulated by either the SEC or the advisor’s state’s securities regulator. Which governing body regulates them depends on how much money the advisor manages^[0]

How to find a registered investment advisor

Many registered investment advisors are available online and offer a wide range of pricing structures. Here are some guidelines to make it even easier to find financial help.

1. Know what you need. If you only need help managing investments, a robo-advisor may be a good choice. If you need help with tax strategy, estate planning or want to work with a human, consider traditional financial firms that are also registered investment advisors.

» Looking for an advisor? View our list of the best financial advisors

2. Be picky when it comes to fiduciaries and fees. Some financial advisors have a fiduciary duty to their clients. This means they work in their client’s best interest, instead of recommending investments that financially benefit them. Also learn how a financial advisor is paid by asking about their fee structures. A fee-only advisor is generally ideal, as that means they do not receive commissions from recommended investments.

3. Find an RIA who can relate. It is possible to find an advisor with similar life experiences if that’s important to you. Some RIAs specialize in financial planning for the LGBTQ+ community, people with disabilities, veterans, those looking for halal investing options or who are recovering from financial abuse. There are also resources to find financial advisors of color.

4. Take titles with a grain of salt. Many of the titles advisors use, such as "financial advisor," are not regulated. Just because a potential advisor uses a title that sounds official does not mean that they have any particular training or certification.

5. Verify their background. No matter what title an advisor uses, it’s on you to vet them. Check an advisor's background or credentials before trusting them with your financial information.

» Learn how to vet the different types of financial advisors

6. Consider using a matching service. Services such as Zoe Financial and Harness Wealth connect clients with a pre-vetted network of financial professionals. These services are free to users — the advisors typically pay to be part of the network. (NerdWallet also operates NerdWallet Advisory, a registered investment advisor offering advisor matches.)

RIAs vs. investment advisor representatives (IARs)

RIA may be more commonly used than IARs, and often interchangeably. However, RIAs are firms, and IARs are advisors who work for RIAs^[0]

How do RIAs make money?

Sometimes firms or advisors offer a few fee options. Don’t be afraid to ask any advisor what they charge and compare their fees to others before moving forward.

• Some RIAs charge an ongoing fee, based on the amount of assets they manage for you. This is often called an AUM, or assets under management, fee and can be billed monthly, quarterly or annually.  

• Some advisors earn commissions from the products they sell to you. These are called fee-based financial planners and they are likely not fiduciaries. You may want to avoid those who use this fee structure. 

• Some charge an hourly fee for special projects; others may offer a flat fee for a specific service or financial plans.