An independent RIA is a registered investment adviser firm you own, registered under the Investment Advisers Act with the SEC or your state and held to a fiduciary duty. You keep a larger share of your revenue but carry the firm's costs and compliance. The model fits advisors with a portable, fee-based book who want control and are ready to run a business.
Understand the legal and operating mechanics before you turn a private concern into a public move.
- An independent RIA is a firm you own that gives investment advice for a fee, registered under the Investment Advisers Act of 1940 and bound by a fiduciary duty to clients.
- Where you register depends on size: an adviser managing roughly one hundred million dollars or more generally registers with the SEC, while smaller firms register with the state or states where they do business.
- The people giving advice are licensed too. An investment adviser representative usually holds the Series 65, or the Series 66 paired with the Series 7.
What is an independent RIA, and how is it different from where you sit now?
An independent RIA is a registered investment adviser firm that you own and control, rather than an advisor operating under someone else's broker-dealer or corporate RIA. "RIA" is the entity. "Independent" is the ownership. The firm is registered under the Investment Advisers Act, it charges clients a fee for advice, and it owes those clients a fiduciary duty. When people say "go independent," this is usually the structure they mean: your own registration, your own client agreements, your choice of custodian, technology,
Are independent financial advisors regulated?
Yes, independent financial advisors are regulated, and the fiduciary standard they answer to is in some ways higher than the suitability world many of them leave. An independent RIA registers under the Investment Advisers Act of 1940, files a Form ADV that lays out its services, fees, and conflicts, and updates that filing on a schedule. The firm doesn't escape oversight by going independent. It trades one supervisor for a regulator and a compliance program it now runs itself.
How does the math on an independent RIA actually work?
The math changes shape when you go independent: instead of a payout percentage of your production, you keep the revenue and then pay the firm's expenses yourself. At a brokerage, a grid decides your cut and the firm quietly covers real estate, technology, errors-and-omissions coverage, staff, and platform fees out of the rest. As an independent RIA owner, a larger share of every revenue dollar lands in your firm first. Then custody, software, compliance, office, and payroll come out of it.
Should you leave your independent broker-dealer to start an RIA?
Whether you should leave your independent broker-dealer to start an RIA comes down to how much of your business still runs on commissions. If your book is mostly fee-based advisory, the broker-dealer may be taking a cut and adding a supervision layer for work you're effectively doing yourself. If you still do meaningful commission business, that requires a broker-dealer, and the clean answer is often a hybrid: your own RIA for advisory revenue,