Schwab Talk Blog

Independent Advisors

Defining the Independent Registered Investment Advisor (RIA)*

By Anita Fox | Jul 18, 2011
 
 

For nearly 25 years, Schwab Advisor Services has provided custodial, operational and trading support to RIAs. Given our history and experience in the RIA space, we thought we’d take the opportunity to share some information that we hope will shed light on RIAs ― one of the fastest growing segment of the financial services industry.

What is an RIA?

  • An RIA firm is a professional investment 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.
  • Most RIA firms 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 their state securities regulator and are subject to the Investment Advisers Act of 1940, and have a fiduciary duty to act in the best interests of their clients.  
  • Many independent RIAs are owned by the individual advisors who run them.

Why might an independent RIA firm be a good choice for an investor?

  • Independence – 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.
  • Compensation – Some independent RIAs’ compensation is directly related to growing their client’s assets, which can benefit both the advisor and client alike.

Did you know?

  • Schwab Advisor Services supports nearly 7,000 RIA firms. This represents approximately 25 percent of the total RIA assets under custody.
  • Schwab Advisor Services has more than 1,800 employees dedicated to providing world-class custody, trading, and operational support to RIAs.
  • This is one of the fastest growing segments in the financial services industry: at the end of 2010, more than 16,000 independent RIA firms managed $2.8 trillion of U.S. wealth.

Stay tuned for more RIA industry news on the Schwab Talk blog…

* Source: Charles Schwab, 2011

* Independent investment advisory firms are not affiliated with Charles Schwab & Co., Inc., and their personnel are not representatives of or supervised by Charles Schwab & Co., Inc. This blog is not intended as a recommendation or endorsement of any specific independent advisor. You must decide whether to hire an advisor and what authority to give the advisor.

State-registered RIAs may not file a Form ADV, and advisors who are exempt reporting firms only complete parts of Form ADV.

Schwab Advisor Services™ is a business segment of The Charles Schwab Corporation serving independent investment advisors, which includes the custody, trading and support services of Charles Schwab & Co., Inc.(“Schwab”). Schwab is a subsidiary of The Charles Schwab Corporation.

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Please Note: By posting content to the Schwab Talk blog, you acknowledge that you are over the age of 13 and agree to allow The Charles Schwab Corporation to publish, display and/or exhibit all or part of the submitted comment, along with your first name, in connection with this blog or for any other lawful purpose. You also agree to indemnify and hold Charles Schwab harmless against all liabilities, losses, claims and expenses arising from your posting of materials on this blog. Third-party posts do not necessarily reflect the views of The Charles Schwab Corporation, its subsidiaries or its affiliates. The company may, in its sole discretion, reject comments for any reason deemed appropriate.

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