How does an RIA differ from a brokerage firm?
RIAs are in the investment management business and we are regulated by the Investment Advisors Act of 1940. In contrast, brokerage firms are primarily in the financial product sales and distribution business and they are regulated by the Securities Act of 1933 as well as other laws. As an RIA under the 1940s Act, we have a higher level of fiduciary responsibility than brokerage firms. We are required by law to work in our client’s best interest. Our fee is based on assets under management (AUM) rather than the brokerage model that is tied to the sale and distribution of financial products.
