Registered Investment Adviser

Registered investment advisers, often called RIAs, are regulated mainly under the Investment Advisers Act of 1940. Larger advisers register with the Securities and Exchange Commission, while smaller ones usually register with the state where they operate.

RIAs owe their clients a fiduciary duty, which means they must act in the client's best interest, disclose conflicts of interest and seek the best execution for trades. They must provide clients with a disclosure document describing their services, fees, conflicts and disciplinary history.

For example, a financial planner who charges clients a percentage of the assets they manage, or a flat fee for a financial plan, would typically be registered as an investment adviser.

RIAs differ from broker-dealers, who are generally paid through commissions and held to a best-interest standard when making recommendations to retail customers. Many professionals are dually registered. Other countries regulate investment advisers differently; in the United Kingdom, for example, advisers must be authorised by the Financial Conduct Authority.