Registered Investment Adviser (RIA)

The definition covers paid securities advice, and asset size decides whether the SEC or a state registers the adviser.

Advisers Act section 202(a)(11) defines an investment adviser as anyone who, for compensation, is in the business of advising others on the value of securities or on investing in, buying or selling them. It excludes lawyers and accountants whose advice is solely incidental to their practice, and broker-dealers whose advice is solely incidental to their business and who receive no special compensation for it.

Section 203A generally leaves smaller advisers to the states. Under Rule 203A-1, an adviser with at least $100,000,000 but less than $110,000,000 under management may, but need not, register with the SEC, and need not withdraw until it falls below $90,000,000.

The fiduciary standard governs the advice, and a hypothetical fee shows how the pay model differs from a commission.

The SEC's 2019 interpretation states that 'under federal law, an investment adviser is a fiduciary,' and that the duty 'comprises a duty of care and a duty of loyalty.' The care duty includes acting in the client's best interest, seeking best execution and monitoring over the relationship; the loyalty duty means not placing the adviser's interest ahead of the client's and disclosing conflicts.

Hypothetical: an adviser bills 1% a year on a $1,000,000 DST position, $10,000 a year, while a commissioned purchase might carry a one-time 5% commission, $50,000. The two cross at about five years, and an asset-based fee on an illiquid interest depends on how that interest is valued for billing. Run your own numbers with your CPA.

Some DST programs sell classes with different fee schedules. One REIT's Form 10-K for 2025 describes certain classes of DST interests that carry ongoing fees of up to 1.0% a year of equity or NAV; the class available to you is set in each PPM.

It bites when one person wears two hats, because the standard depends on the role taken for that recommendation.

A firm may be both a broker-dealer and an adviser. When it acts as a broker-dealer, Regulation Best Interest applies and the firm is paid by the transaction; when it acts as your adviser, the fiduciary duty applies. Ask which role covers your DST purchase and get the answer in writing; the trade-offs are set out at advisor fees and conflicts for DSTs.

An SEC-registered adviser is also one of the professionals who may confirm your accredited status in a Rule 506(c) offering. BrokerCheck includes investment adviser firms, drawn from the SEC's Investment Adviser Registration Depository.