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In today’s world there are multiple options when seeking a financial advisor. From online “robo advisors”, to broker-dealers, to Registered Investment Advisors (RIAs), each claiming to help with your financial needs. Maybe you’re looking for a financial planner to manage your retirement savings, or you’re looking for investment advice. Or maybe, you are trying to save for your first home. How do you know which advisory type to use?
We’ve created a short list summarizing some of the general benefits RIAs provide.
RIAs are Fee-Only
What exactly does this mean? This means RIAs charge an annual fee for services, ranging anywhere from 1% to 2% of the assets being managed. However, this is not to be confused with fee-based, as this is typically charged by broker-dealers earning commissions from the products they sell.
For an idea of what your annual fees would be, calculate your rate with Doyle Wealth Management’s fee calculator.
As the client of a fee-only RIA, you know upfront exactly what you are paying for and the comprehensive services provided. Which leads us to our next benefit – Fiduciary Responsibility.
RIAs are Required to Keep Your Best Interest in Mind
This is because they have a fiduciary responsibility. “A fiduciary is a professional who is required to put your interests above all others, including their own. A fiduciary will be your personal, professional advisor,” says Bob Doyle, President, Doyle Wealth Management (DWM).
You might be surprised to learn not all financial advisors are required to act in the best interest of their client. For example, a securities broker needs to only provide what is suitable to the client, as opposed to what is in the best interest of the client. Brokers might have conflicts and those conflicts are not required to be disclosed to the client.
RIAs are regulated by the Securities and Exchange Commission (the SEC), which is where the fiduciary responsibility comes into play – By virtue of being registered with the SEC as an RIA, an advisor is considered a fiduciary by the SEC.
Furthermore, having a fiduciary responsibility to the client reduces potential conflicts of interest. This is because fiduciaries are required to provide any potential conflicts of interest to their clients, creating an environment of complete transparency between the RIA and each client.
RIAs are Focused on the Client
RIAs offer comprehensive services, with the goal being to provide you with a roadmap of what you need to do to achieve your financial goals. Have a question about your portfolio or any financial concern? Your RIA will make time to speak with you and address these concerns. At DWM, your first meeting will involve discussing your long-term goals, risk tolerance, what your comfortability is with investments, and the ups and downs of the market. DWM will take an all-encompassing approach, by looking at your assets, liabilities, income, and expenses.
These relationships formed with your RIA are key to achieving long-term goals.
So, why wouldn’t someone select an RIA to manage their assets?
The biggest reason might be the idea that RIAs require a specific minimum asset amount in order to be accepted as a client. But this has evolved over the years – Some RIAs now offer programs to help provide high-end financial services to those still building their wealth.
To learn about the Doyle Wealth Management Partner Program, or to just learn more about how an RIA might help you, please feel free to schedule a free consultation with one of our wealth management advisors.