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What’s a Registered Investment Advisor?
Independent registered investment advisors (RIAs), like Rede ®, are professional independent advisory firms that provide personalized financial advice to their clients, many of whom have complex financial needs. Because these advisors are independent, they are not tied to any particular family of funds or investment products. As fiduciaries, they are held to the highest standard of care and are required to act in their clients’ best interests at all times. They are subject to oversight by the Securities and Exchange Commission (SEC) or their equivalent regulator at the state level.
Approach
We manage client relationships using a comprehensive approach across multiple financial disciplines.
Brokers are employees and act as intermediaries between buyers and sellers.
Compensation
We receive a management fee, as a percentage of assets, or a flat fee.
Brokers receive commissions based on the type of securities and numbers of trades, sales bonuses, 12b-1s, and finder’s fees.
Custodian
Our choice of independent institutions that fit client needs (e.g., Schwab, Fidelity, or TD Ameritrade).
Limited to the parent company.
Disclosures
Full Disclosure and transparency as required by the SEC, our fiduciary responsibility, and the Investment Advisers Act of 1940.
Limited requirements.
Investment Choice
Clients have direct access to decision-makers.
A broker typically relies on the parent company for investment recommendations.
Offerings
We have access to a vast number of offerings and an open-architecture platform.
A broker has access to a vast number of offerings but may direct funds to proprietary products.
Ownership
Independently Owned and Operated.
A Large, Financial Conglomerate.
Proprietary Products
None.
Many brokers offer the proprietary products of their parent company and receive additional compensation for doing so.
Standards
We are subject to SEC regulation and held to a fiduciary standard: We must act in the best interest of our clients at all times.
Brokers are self-regulated and monitored by FINRA, which holds them subject to a standard of suitability.
Why is the fiduciary standard important?
“You can satisfy the suitability standard by recommending the least suitable of the suitable options, as long as it falls within the general suitability test. The other standard of care, the fiduciary standard, basically charges advisers with putting their clients’ best interest ahead of their own.”
Barbara Roper, Director,CFA
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Please Note:Limitations: The above Client Situations are hypothetical-not involvingactual Rede clients. None of the Client Situations should be construed by a client or prospective client as a guarantee that he/she will experience the same or a certain level of results or satisfaction if Rede is engaged, or continues to be engaged, to provide investment advisory services.
