What is an IRA

A Registered Investment Advisor (“RIA”) is a financial professional or firm that provides investment advice and manages investment portfolios on behalf of clients. RIAs are regulated by the U.S. Securities and Exchange Commission (SEC) or state securities regulators, depending on the amount of assets they manage. 

The most significant impact of working with an RIA is they have a Fiduciary Duty. RIAs have a legal and ethical obligation to act in the best interests of their clients. This means they must prioritize their clients' financial well-being and avoid conflicts of interest. 

To operate as an RIA, individuals or firms must register with the SEC or state securities regulators, depending on the amount of assets they manage. Registration typically involves disclosing information about the firm's business practices, fees, and any potential conflicts of interest. RIAs are subject to regulatory oversight to ensure they comply with relevant securities laws and regulations. This includes periodic examinations by regulatory authorities. Lastly, RIAs are typically required to provide clients with clear and comprehensive disclosures about their services, fees, and potential conflicts of interest. 

RIAs offer personalized investment advice tailored to the unique financial goals, risk tolerance, and circumstances of their clients. This advice can include asset allocation, investment selection, and ongoing portfolio management. Many RIAs have discretionary authority over client accounts, which means they can make investment decisions on behalf of clients without obtaining explicit approval for each trade. This allows for more efficient management of client portfolios. 

It's important to note that not all financial professionals who provide investment advice are registered investment advisors. Some may operate under different regulatory frameworks, such as broker-dealers, who may have different standards of care and compensation structures. When seeking financial advice, it's essential to understand the regulatory status and obligations of the advisor you are considering and ensure that their services align with your financial goals and preferences. If you are looking for an RIA, contact Foundation Wealth and Tax Advisors for your financial planning needs today.