Registered investment advisor (RIA): the complete guide

A registered investment advisor (RIA) is a firm or person registered with the SEC or a state securities regulator to give investment advice for a fee, and the registration carries one thing that defines the whole job: a fiduciary duty to act in the client's best interest. That single word, fiduciary, is the difference between an RIA and most of the brokers and "advisors" you see advertised. If you remember nothing else from this guide, remember that the RIA label is a legal status, not a marketing one, and it is the strongest baseline standard of care a financial professional in the United States can hold.

This guide is written for two readers: someone deciding whether to become an RIA, and someone trying to understand what they are hiring. We will cover the legal definition, the exact path to register, the rules you live under, what RIAs actually charge (with numbers that trace to a primary source), and where the industry is going. Every figure here is dated so you can check it against the source.

What a registered investment advisor actually is

An RIA is a business that is "in the business of" advising others about securities for compensation, and that has registered to do so. The governing law is the Investment Advisers Act of 1940. Note the term carefully: the firm is the RIA. The individual humans who give advice on the firm's behalf are investment adviser representatives (IARs). People use "RIA" loosely to mean both, but legally they are different things, and they register differently.

A few distinctions that trip people up:

• RIA vs. financial advisor. "Financial advisor" is a generic term with no legal meaning. An RIA is a specific regulatory status. A financial advisor may or may not be an RIA, an IAR, a broker, an insurance agent, or some combination.
• Adviser vs. advisor. The federal statute spells it "adviser" (Investment Advisers Act, registered investment adviser). The industry and most marketing spell it "advisor." They mean the same thing. We use the common "advisor" spelling here except when quoting the law.
• Firm vs. person. The firm registers as an RIA. Each person who advises clients registers as an IAR, usually with the states where they do business.

The reason the RIA structure exists at all is the fiduciary duty, so that is where to start.

The fiduciary standard, in plain terms

When the SEC clarified what an adviser's fiduciary duty means (in a formal interpretation adopted June 5, 2019, effective July 12, 2019), it described two obligations that cannot be waived.

• Duty of care. The advice must be in the client's best interest given the client's objectives. The adviser has to understand your situation, give suitable advice, and seek best execution of trades.
• Duty of loyalty. The adviser must eliminate conflicts of interest, or fully and fairly disclose them so you can give informed consent. It cannot place its own interests ahead of yours.

The SEC also said, in that same interpretation, that an adviser cannot disclaim its fiduciary status, cannot use a blanket waiver of conflicts, and cannot waive specific obligations under the Act. The duty travels with the relationship and follows the scope of what you hired the adviser to do.

SEC vs. state: who you register with

Whether you register with the SEC or with state regulators depends mostly on how much money you manage, measured as regulatory assets under management (RAUM). The thresholds have been stable since 2012.

$100M

RAUM at which you may register with the SEC

$110M

RAUM at which you must register with the SEC

<$100M

Generally register with your state(s)

The simple version:

• Under $100 million RAUM: you generally register with the state(s) where you have a place of business or enough clients to trip a state's threshold.
• $100 million to $110 million RAUM: a buffer zone. You may register with the SEC but are not required to.
• $110 million or more RAUM: you must register with the SEC.

A few important wrinkles. You assess your eligibility annually, not intra-year, so you do not flip registration every time markets move your RAUM across a line. There are exceptions that push smaller advisers up to the SEC anyway (for example, advisers to registered investment companies, internet-only advisers, and advisers that would otherwise have to register in 15 or more states). And mid-sized advisers (roughly $25 million to $100 million) may be forced to register with the SEC if their home state does not examine advisers. Always check the SEC's current Form ADV instructions and your home state rules before you assume.

How to become an RIA: the steps

Here is the actual sequence for launching a firm. The exact control names and forms matter, so they are spelled out.

1. 1

   Pass the qualifying exam

   Most IARs must pass the Series 65 (Uniform Investment Adviser Law Examination), or hold the Series 7 plus Series 66, or qualify via a waiver credential (CFP, CFA, ChFC, PFS, CIC).

2. 2

   Form and structure the firm

   Create the legal entity (LLC or corporation), choose your fee model, and decide SEC vs. state based on expected RAUM.

3. 3

   Open IARD/CRD accounts

   Set up your firm's account on the Investment Adviser Registration Depository (IARD), operated by FINRA, and fund it to cover filing fees.

4. 4

   File Form ADV

   Submit Form ADV Part 1 electronically through IARD. Write Part 2 (the brochure) in plain English describing services, fees, and conflicts. Add Part 3 (Form CRS) if you serve retail clients.

5. 5

   Build the compliance program

   Adopt written policies and procedures, a code of ethics, recordkeeping, and a privacy policy. Designate a chief compliance officer (CCO).

6. 6

   Get approved, then maintain it

   Wait for the SEC (up to 45 days) or your state to declare you effective. Then update Form ADV at least annually within 90 days of fiscal year-end and amend promptly when material facts change.

The exam

Most people becoming an IAR take the Series 65, the Uniform Investment Adviser Law Examination. As of June 2026 it has 130 scored questions plus 10 unscored pretest questions, a 180-minute time limit, and a passing score of 92 of 130 correct (about 72%). The exam fee is $187, paid to FINRA, and you do not need a sponsoring firm to sit for it (unlike the Series 7). If you already hold a Series 7, you can pair it with the Series 66 instead. Certain designations (CFP, CFA, ChFC, PFS, CIC) waive the Series 65 requirement in most states. (Source: NASAA and FINRA, Series 65 exam pages, 2026.)

Form ADV, the document that defines you

Form ADV is the registration form and your public disclosure. It has three parts:

• Part 1A is structured data about the firm (filed by everyone). State registrants also file Part 1B with state-specific items.
• Part 2 is the narrative "brochure," written in plain English, covering your services, fee schedule, conflicts, disciplinary history, and more. Clients get this.
• Part 3 (Form CRS) is a short relationship summary required if you serve retail investors.

Form ADV is public. Anyone can read yours on the SEC's Investment Adviser Public Disclosure site. So can you, before you hire anyone, which is the single most useful due-diligence move most clients never make.

What it costs to register and run an RIA

Two cost buckets matter: the fees to register, and the ongoing cost of compliance and operations.

On the filing side, the IARD system fee for investment adviser representatives is $15 per IAR for setup and renewal as of January 1, 2026 (down from $45 when IARD launched in 2001). NASAA has continued to waive the annual system processing fee for state-registered adviser firms through 2026. State registration fees themselves are set by each state and vary, so budget for those separately. SEC-registered firms pay no SEC registration fee, but do pay the IARD system fees by RAUM tier. (Source: NASAA 2026 IARD fee schedule.)

The bigger number is the ongoing cost: compliance consulting, a CCO's time, errors-and-omissions insurance, technology, and recordkeeping. A solo or small firm should plan for several thousand to low five figures per year in compliance and tooling, scaling up with assets and headcount. The exact amount depends heavily on whether you outsource compliance and which custodian and software stack you use.

What RIAs charge clients (and how to read a fee schedule)

The dominant model is a percentage of assets under management. Per the 2024 Kitces "How Financial Advisors Actually Charge" study (621 U.S. advisors), 92% use an AUM fee and 86% rely on it as their main revenue source. The headline number people quote is "1%," and that is roughly right at the low end of portfolio size.

~1.0%

Median blended rate on portfolios up to $1M

100-120 bps

Typical range (25th-75th pct) under $1M

80-100 bps

Typical range as portfolios pass ~$2M

The key insight: AUM fees are usually graduated, so the rate drops as the portfolio grows. The Kitces data shows 62% of advisors charge at least 1% on a $1 million portfolio, but only 32% do on a $2 million portfolio. Other models are gaining ground because they decouple price from portfolio size:

• Flat or fixed annual fee (for example, a set dollar amount per year regardless of assets).
• Hourly for project or advice-only engagements.
• Subscription or retainer (a recurring monthly or quarterly fee).
• Performance-based fees, which are restricted by the Advisers Act to "qualified clients" only.

RIA vs. broker-dealer

This is the comparison most clients actually care about, because it changes who is on your side.

RIA / IAR

• Standard: fiduciary, for the whole relationship
• Compensation: usually fees (AUM, flat, hourly)
• Regulator: SEC or state securities regulator
• Registration form: Form ADV (public brochure)
• Conflicts: must eliminate or disclose and get consent

Broker-dealer / RR

• Standard: Regulation Best Interest, recommendation-focused
• Compensation: often commissions on transactions
• Regulator: SEC and FINRA
• Registration form: Form BD; reps via Form U4
• Conflicts: disclose and mitigate per Reg BI

Many firms are dually registered and can act in either capacity at different moments, which is exactly why the disclosures matter. If you want continuous, fee-based, fiduciary advice, an RIA relationship is usually the right call. If you want to place occasional trades and pay per transaction, a broker may fit. Neither is "good" or "bad" in the abstract; the question is which standard governs the advice you are getting.

The state of the RIA industry

The RIA channel has grown for years, and the latest data continues the trend. The Investment Adviser Association's 2026 Industry Snapshot (reporting 2025 calendar-year data, published June 2026) found the industry expanding on every axis.

16,544

SEC-registered investment advisers in 2025

73.7M

Clients served, up 7.7% year over year

1.1M

Non-clerical employees, up 7.5%

The snapshot also reported aggregate assets under management rising 22.3% to about $176.8 trillion in 2025, a figure inflated by strong markets and by the way RAUM is counted across all adviser types (including very large institutional and private-fund advisers). The number that matters more for the independent-advice trend is the steady climb in firm count and client count, which has continued for over a decade. The structural drivers are the same ones that have powered the move toward independence: advisors want to own their books and operate as fiduciaries, and clients increasingly prefer fee-based, conflict-light relationships.

A note on global RIAs

The "RIA" acronym is United States terminology tied to the Investment Advisers Act of 1940. Other countries have analogous regimes with different names and rules. In India, for example, "Registered Investment Adviser" is a SEBI-regulated category with its own qualifications and fee caps, and it is a genuinely different framework, not just a different spelling. If you are operating or hiring outside the U.S., do not assume the U.S. thresholds, exams, or fee norms apply. Check the local regulator.

Where meeting records fit into an RIA practice

This is a regulated business built on documented advice, so the recordkeeping side is not optional. RIAs have to keep records of communications and the basis for recommendations, and client meetings are where most of that lives. Capturing what was actually discussed (objectives, risk tolerance, the advice given, and the client's consent to any disclosed conflict) protects both sides if anything is ever questioned.

For client video calls, an AI notetaker that records, transcribes, and summarizes the conversation gives you a searchable record of every meeting without a clunky bot sitting in the call. Scribbl does this for Google Meet from the browser, with Zoom and Teams support for teams, which is useful when your advice happens over video. Treat any recording as part of your compliance and privacy program: get consent, follow your state's recording laws, store the records per your retention policy, and never let a transcript substitute for the formal documentation your CCO requires. If you want the broader picture on tools built for advisory firms, see our companion piece on RIA software, and for the meeting-notes mechanics, how to take better meeting notes and client meeting notes templates.

Frequently asked questions

Is an RIA the same as a financial advisor?

No. "Financial advisor" is a generic, unregulated term. An RIA is a firm with a specific legal registration under the Investment Advisers Act of 1940 (or a state equivalent), and it carries a fiduciary duty. A financial advisor might be an RIA, an IAR working for one, a broker, an insurance agent, or none of those. Always ask how the person is registered and which standard governs their advice.

Do I need a Series 7 to become an RIA?

Not necessarily. The most common path is passing the Series 65 exam, which does not require a sponsoring firm. If you already hold the Series 7, you can pair it with the Series 66 instead. Certain professional designations (CFP, CFA, ChFC, PFS, CIC) waive the exam requirement in most states. Confirm your specific state's rules, since states administer IAR registration.

How much does an RIA charge?

Most charge a percentage of assets under management, with a median blended rate around 1% on portfolios up to $1 million that declines as the portfolio grows (Kitces, 2024). Flat-fee, hourly, and subscription models are growing. You can read any firm's exact fee schedule in item 5 of its Form ADV Part 2 brochure on the SEC's public disclosure site.

Should I register with the SEC or my state?

It depends on your regulatory assets under management. As of June 2026, you generally register with your state(s) under $100 million RAUM, may register with the SEC between $100 million and $110 million, and must register with the SEC at $110 million or more. There are exceptions (advisers to registered funds, internet advisers, multi-state advisers, and mid-sized advisers in states that do not examine). The SEC was reviewing whether to raise the threshold as of 2025, so check the current rule before filing.

How do I check if an advisor is a real RIA?

Search the firm or person on the SEC's Investment Adviser Public Disclosure (IAPD) site at adviserinfo.sec.gov. It is free and shows the firm's Form ADV, the brochure with fees and conflicts, and any disciplinary history. Reading it before you hire anyone is the most reliable due-diligence step available.

The bottom line

Being an RIA is a legal status with a fiduciary obligation at its core, not a job title you can claim. If you are becoming one, the path is concrete: pass the Series 65 (or qualify another way), pick SEC or state based on RAUM, file Form ADV, and stand up a real compliance program before you take a dollar. If you are hiring one, the fiduciary duty is the feature you are paying for, and Form ADV is the document that proves it. Either way, keep clean records of the advice you give and the consent you get, because in this business the documentation is the product as much as the advice is.