Investing money is exciting, but it can also be a source of anxiety, especially for those new to the world of investing. As an investor, there are many options available to you, and it can be challenging to decide which path to take. One option is to seek investment advice by working with a registered investment advisor. But what is a registered investment advisor? How can they help you, and do you need one?

How can a registered investment advisor help investors?

What is a Registered Investment Advisor?

A registered investment advisor (RIA) is a professional financial advisor who provides personalized financial advice to individuals and institutions. The primary role of an RIA is to appraise and manage investments, offer financial planning and wealth management services, and assist clients in meeting their financial goals. RIAs are required to register with the Securities and Exchange Commission (SEC) and follow specific regulations and reporting requirements.

How Can an RIA Help You?

An RIA can help you in several ways. First, they can provide professional advice when making financial decisions. Whether you’re planning for retirement or investing in stocks, an RIA can help you achieve your goals while minimizing risk. Second, RIAs can offer you a personalized investment strategy that’s tailored to your unique needs and goals. Third, an RIA can help you manage your portfolio and make decisions based on your financial objectives and risk tolerance. Below are some specific services a registered investment advisor can offer.

Risk Profiling

The first task of any RIA is to assess the risk-taking capacity of their clients. To do this, they evaluate a clients investment goals and financial situation to create a unique risk profile. Risk profiling is essential to ensure investments align with a client’s investment objectives while keeping in mind their risk appetite.

Investment Planning

Once a risk profile is mapped out, a RIA can help develop a personalized investment plan. This investment plan can outline the different types of investments, the duration, and investment vehicles suitable for achieving goals safely. If given the opportunity, discuss the various investment options available such as stocks, bonds, mutual funds, real estate, and more, with your RIA to decide which option is best.

Portfolio Management

Portfolio management is also a service a RIA can offer. This means investments, continual monitoring, and rebalancing of a portfolio to reflect any changing goals and risk appetite. This means they can make sure investments are diversified to minimize the risk associated with any one particular investment. Your RIA can help to create a portfolio that strikes a balance between growth, income generation, and risk management

Fiduciary Duty

RIAs are held to a fiduciary standard, which means they are legally required to act in your best interest. They are obligated to disclose any potential conflicts of interest and provide complete transparency in all their dealings with you. This is a critical aspect of the relationship between an RIA and their clients, as it ensures the advisor is always working towards their clients’ best interests.

Registered investment advisers are held to a fiduciary standard.

Do You Need an RIA?

Determining whether you need an RIA will depend on your financial goals, investment knowledge, and financial resources. For new investors who may be looking for expert guidance, an RIA or certified financial planner can be an excellent choice. For the experienced investor who is confident in managing investments, then an RIA may not be necessary. However, for those looking to expand their investment knowledge and strategies, then an RIA may be able to provide valuable insights and advice.

Pros of Working with an RIA

No Conflicts of Interest: As mentioned earlier, registered investment advisors act as fiduciaries, so they have to put their client’s financial interests first. Clients don’t need to worry about being sold a product because a commission incentivizes the RIA.

Customized Investment Portfolio: RIAs are less homogenous in their approach when compared to broker-dealers offering investment advice that is typically more generic. The former can ensure personal investment objectives are met and act as asset managers that provide investment advice tailored to their client’s specific needs.

Extensive Knowledge Base: As experts in the field of finance, registered investment advisors employ their vast knowledge base to analyze investment options and determine the best investment strategy for their clients.

Cons of Working with an RIA

Fees: As with any professional service, you pay for the expertise. Depending on the RIA, the management fee could range from 1% to 3% of assets under management. That said, some may view these fees as a small price to pay for more seasoned and professional investment services.

Not All RIAs Are Equal: Before handing over your money, do your research, and don’t let your guard down. You don’t want to end up with someone inexperienced or unethical.

How To Choose an RIA

Choosing the right registered investment adviser is an important decision that requires careful consideration. For those seeking RIA services they should seek someone with experience, knowledgeable, and is considered a trustworthy financial professional. Consider factors such as their investment philosophy, service model, fees, and track record. It’s also important to ensure the RIA is registered with either the U.S. Securities and Exchange Commission (SEC) or state securities regulators and has a clean regulatory history.

Choosing the right investment adviser requires careful consideration.


Investing money can not only be exciting but overwhelming. Working with a registered investment advisor can make a significant difference in setting you up for success. They can help their clients make better financial decisions, offer personalized investment strategies, and to achieve financial goals. However, whether or not you need an RIA depends on investment knowledge and financial goals. Whatever path you choose, remember to do your research, make informed decisions, and work with professionals you trust.

As a member of Planning Made Simple, you can work with your Planning Made Simple Coach, who can answer questions about working with financial advisors, investment management, or fiduciary responsibility. They can also offer investment advice that may be in your financial interest. If you’re not a member of Planning Made Simple yet, join our community today.