What Is an SEC-Registered Investment Advisor?

Registered investment advisors (or advisers) are individuals or firms that provide paid investment advice. Also called asset, investment, portfolio or wealth managers, RIAs must register with state or federal regulators. Importantly, RIAs are not the same as licensed brokers or generic, often unlicensed “financial advisors.”

What is an SEC-registered investment advisor?

Investment advisors fit one of three categories based on their regulatory assets under management (RAUM):

  • Small advisors manage under $25 million
  • Mid-sized advisors manage $25 to $100 million
  • Large advisors manage $100+ million

Typically, advisors with under $100 million register with one or more state regulatory authorities based on their area of operation. Advisors who exceed $100 million in assets must register with the Securities and Exchange Commission (SEC) instead.

Some small- to mid-size advisors may also be allowed (or required) to register with the SEC. (For instance, if they’re required to register in 15 or more states.)

How SEC-registered investment advisors work

RIAs aren’t limited to securities advice. Some also provide portfolio management, budgeting, insurance, estate, retirement, and/or brokerage services or planning.

In the process, they must adhere to industry regulations and best practices, including:

Compliance with all state and federal regulations

All RIAs must:

  • Register with the proper state or SEC
  • Disclose all potential risks or conflicts of interest for recommended assets
  • Be able to prove that an investment fits their clients’ best interests
  • Comply with FINRA and SEC regulations

Maintaining their fiduciary duty

All RIAs have a fiduciary duty – that is, they’re required to act in your best interest. Their fiduciary status helps prevent abuses such as offering subpar products that pad their pocketbooks instead of yours.

Clearly outlining their fee structure

RIAs are required to be upfront with their fee schedule, including negotiable fees and outside compensation.

Most RIAs charge fees based on your AUM (assets under management), with human advisors generally charging more than automated advisors.

Other possible fee schedules include:

  • Portfolio performance fees
  • Asset class-specific fees
  • Hourly, flat-rate, or subscription-style fees

RIAs vs. broker-dealers 

Importantly, RIAs – including Q.ai – are not broker-dealers.

While RIAs provide investment advice, broker-dealers conduct the actual trading of various financial assets. Additionally, brokers have no fiduciary duty – they simply have to prove an asset could be “suitable” for their clients.

Doing your due diligence 

Aside from scoping out fees and services, it’s wise to check that an RIA is registered before signing up. You can find their status with FINRA’s BrokerCheck, Investor.gov’s Check Out Your Investment Professional, and the SEC’s Action Lookup tool.

Meet the best RIA around (okay, we could be biased)

Quantalytics Holdings, LLC – or Q.ai, as you know it – is a unique SEC-registered investment advisor that harnesses the power of AI.

Our in-house algorithm monitors market trends to construct Investment Kits, make trades and deploy advanced hedging strategies. After learning more about your goals and risk tolerance, Q.ai pairs you with the Investment Kits best-suited to help you achieve your financial dreams.

Better yet, we don’t charge our investors a dime.

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Q.ai is the trade name of Quantalytics Holdings, LLC Quantalytics. Quantalytics offers automated financial advice tools through Quantalytics Investment Advisors, LLC (“QAI”), a SEC registered investment advisor. QIA’s Investment advisory services will be available only to residents of the United States. Disclosures concerning QIA’s investment advisory services are available on its Form ADV filed with the SEC. The parent company of ForbesMedia LLC, Forbes Global Media Holdings Inc. ("Forbes") has a material ownership interest in Quantalytics. Forbes does not give representation nor warranty with respect to the accuracy or completeness of the content on this website. The content on this website is for informational purposes only and does not constitute a comprehensive description of Q.ai`s investment advisory services. By using this website, you understand the information being presented is provided for informational purposes only and agree to our Terms of Use and Privacy Policy. QAI relies on information from various sources believed to be reliable, including clients and third parties, but cannot guarantee the accuracy and completeness of that information. Nothing in this communication should be construed as an offer, recommendation, or solicitation to buy or sell any security. No representation or warranty can be given with respect to the accuracy or completeness of the information, and is subject to updating, revision, and amendment. Additionally, QAI or its affiliates do not provide tax advice and investors are encouraged to consult with their personal tax advisors. All investing involves risk, including the possible loss of money you invest. Past performance doesn’t guarantee future performance. © 2023 Quantalytics Holdings, LLC. All Rights Reserved.

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