top of page

What Are Registered Investment Advisors (RIAs)?

Updated: Jul 26, 2022



The stock market is a highly sophisticated and intricate marketplace. Although purchasing and selling stocks may seem simple, it is fairly complicated. The trading decisions you make each time you purchase or sell a company's securities must be supported by appropriate research and strategy to be profitable.


Benjamin Graham, the inventor of investing, wrote in his book Intelligent Investor that "Mr. Market is quite moody". Market movements are greatly impacted by unpredictable human emotions. Many investors can run into difficulties here. Financial experts can help you in such circumstances.


One of the easiest ways to get this expert help is through an RIA. So let’s take a look at the world of RIA, and understand what’s it all about.


Understanding RIA

Simply put Registered Invest Advisors is a person or organization that gives investment advise to investors or individuals who seek their services. So does anyone who gives investment advise become an RIA, no. RIA’s are authorised and recognised by SEBI. This means they have to follow a set of rules and regulations and have a lot of obligations. Most important is that they have to put the clients' interests over their own.


Regulations that an RIA has to follow

Investment advisors in India are governed by the SEBI Investment Advisors Regulation, 2013. Additionally, SEBI specifies the registration requirements, qualifications, eligibility standards, client fees, client agreements, and implementation services. To boost investor confidence and increase openness in investment advisory services, SEBI periodically amends the rules for Registered Investment Advisers (RIAs). These are the guidelines for an RIA.


Additionally, Registered Investment Advisers RIAs should report potential conflicts of interest to their clients. When a client questions the suitability of an investment, the RIA has to explain the process of selection. The process of identifying the asset, risk mitigating strategies undertaken, and proving the suitability of the asset.


Charges

RIAs prepare a financial plan for their investors, taking into consideration their goals, finances, and their current situation. They also charge a fee for their services. It is usually a flat fee for the financial plan and an ongoing fee for the service they provide. Following are the two types of fees collected by RIAs:

  • Percentage of assets: This is similar to trail commission on mutual funds. However, the only difference is that this fee is collected directly from the client and not the fund house. The fees depend on the size of the assets. It is usually 1% to 2% of the assets, and as the asset base increases, the fee comes down.

  • Flat fee: This is a fixed fee charged by the advisor on an annual basis. It is fixed by the mutual consent of the investor and advisor.

Competitors of RIA

Various types of advisors practice and perform advising in various ways. The organizations or individuals who directly compete with RIAs could be :

  • Mutual fund houses

  • Hedge funds

  • Investment banks

  • Online or discount brokers who cater to do-it-yourself (DIY) investors

  • Robo advisors

Benefits of RIA

RIAs have the qualification, certifications, and experience required by the regulation to ensure that the customers get quality advice. Moreover, they also check the suitability of the investment advice and carry a risk profiling as per the guidelines. The RIAs are obliged to act in a fiduciary capacity towards their clients. Therefore, they disclose all the conflicts of interest when they arise. Furthermore, the execution and investment advisory services are separated to reduce conflict of interest. Thus, this brings transparency to the process of investment advice.


How do you check if your RIA is a SEBI Registered one?

The easiest way is to look them up on the SEBI website. On it, the entire database of all the RIA’s is readily available. Here’s the link if you wanna go take a look right now!


Head over to our collection of Rupeeting's smallcases and choose from a wide range of strategies that make you money!



Comments


Commenting on this post isn't available anymore. Contact the site owner for more info.
Rupeeting

Powered by Paterson Securities Group

  • Rupeeting Youtube
  • Rupeeting X
  • Whatsapp

Email: sawaal@rupeeting.com

Support: +91 97697 70046

22/A Shah Industrial Estate

Off Veera Desai Road

Andheri West

Mumbai 400053

Rupeeting Logo.png

Alphaware Advisory Services Private Limited (Brand Name - Rupeeting) makes no warranties or representations, expressed or implied, on products and services offered through the platform. It accepts no liability for any damages or losses, however, caused in connection with the use of, or on the reliance of its advisory or related services. Past performance is not indicative of future returns. Please consider your investment requirements, risk tolerance, goals, time horizon, risk and reward appetite, and the cost associated with the investment before choosing a fund, or designing a portfolio that suits your needs. Performance and returns of any investment portfolio can neither be predicted nor guaranteed. Investments in mutual funds, stocks, ETFs and any other investment products that you see Rupeeting's views being expressed on are subject to market risks. Please read all scheme related documents carefully. The content and data available in the material prepared by the company and on the website of the company, including but not limited to index value, return numbers and rationale are for information and illustration purposes only. Charts and performance numbers do not include the impact of transaction fee and other related costs. Past performance does not guarantee future returns and performances of the portfolios are subject to market risk. The information is only for consumption by the client and such material should not be redistributed. Data used for calculation of historical returns and other information is provided by exchange approved third party vendors and has neither been audited nor validated by the Company. Detailed return calculation methodology is available here. Detailed volatility calculation methodology is available here. Registration granted by SEBI, membership of BASL and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Alphaware Advisory Services Private Limited [SEBI RIA Registration No: INA000015747] [Validity of registration: February 08, 2021-Perpetual] [BASL ID: 1610] [Address: 22/A Shah Industrial Estate, Off Veera Desai Road, Andheri West, Mumbai 400053] [Principal Officer details: Mr. Sagar Lele, Email id: sagar.lele@rupeeting.com, Contact No. +91-9769770046] [Compliance Officer details: Mr. Sagar Lele, Email id: sagar.lele@rupeeting.com, Contact No. +91-9769770046] [Grievance Officer details: Mr. Sagar Lele, Email id: sagar.lele@rupeeting.com, Contact No. +91-9769770046] [Platform Partner: smallcase] [CIN – U74999MH2019PTC320573] [GST No: 27AARCA8847R1ZF] [SEBI regional address: SEBI Bhavan BKC, Plot No. C4-A, 'G' Block, Bandra-Kurla Complex, Bandra (East), Mumbai, Maharashtra, India, Pin Code – 400051.]

© 2025 by Rupeeting

bottom of page