Registered Investment Adviser

A Registered Investment Adviser — almost always abbreviated RIA — is a firm or person that has completed registration under the Investment Advisers Act of 1940 or with a state securities regulator. The defining legal obligation is a fiduciary standard: the adviser must put the client's interests ahead of its own. This is a higher legal bar than a suitability standard, which only requires that advice be suitable for a client rather than strictly in their best interest.

Many family offices work closely with an RIA — or are themselves structured as one — to manage investments on a discretionary basis. A three-generation family with two operating businesses, for instance, might establish an RIA entity within their single family office to provide a clear legal framework for managing pooled family assets. Registration also brings ongoing compliance obligations, including recordkeeping and periodic regulatory filings.

A frequent point of confusion is conflating an RIA with a broker-dealer. Broker-dealers execute securities transactions and are held to different standards under different laws. An RIA's core function is advice, not trade execution, though the two functions are sometimes combined in practice. Families working through manager selection will encounter RIAs regularly, and qualified legal counsel should be involved in any decision about whether to register as one.