Registered Investment Advisor
A Registered Investment Advisor (RIA) manages the assets of individuals, employer retirement plans and institutional investors. He or she must be registered with the state in which he or she operates or the Securities and Exchange Commission (SEC). These advisors are fee-based and must be completely transparent about their compensation. This is based on their code of ethics that they abide by. They may charge a fee based on a percentage of assets they manage, flat fee or hourly rate. An independent RIA cannot be paid any commissions on the accounts they manage. This is far different than your typical broker or wire house. Another important item to remember is that your assets are held with a custodian (ex. Pershing, Schwab, T.D. Ameritrade, etc.). Your investment advisor has discretionary authority to make trades as he or she sees fit. This includes all mutual funds, bonds, equities, and ETF’s.