Definitions

RIA (Registered Investment Advisor): Registered Investment Advisor is a term for wealth managers who register with the Securities and Exchange Commission (SEC).  As a RIA a firm is required to exercise their fiduciary duty by picking stocks, bonds, mutual funds, partnerships or other SEC-registered investments in the best interest of their clients.  They are generally paid on a fee basis determined by the assets under management at the firm.  (Please note, registration as a RIA does not imply a certain level of skill or training.)

 

Fiduciary: A Fiduciary is a person or company that has a duty and obligation to act in the best interestof their clients.  A fiduciary is charged with investing money wisely for the client’s benefit.  This means an SEC Registered Investment Advisor must put their client’s investment needs in front of their own.  Investment “advisors” that are not RIAs may not be bound by a fiduciary duty to their clients.

 

CFA (Chartered Financial Analyst): The CFA Institute awards this designation to investment professionals that have passed a series of comprehensive security analysis examinations over at least a three-year period.  The credential is globally recognized for setting high standards of integrity, investment competence and professional excellence.

 

CIC (Chartered Investment Counselor): The Investment Advisor Association (IAA) awards this designation to a Chartered Financial Analyst (CFA) who has significant experience in investment counseling and portfolio management.  The recipient of this designation must endorse the ICAA Standards of Practice and uphold professional ethical standards.

 

Custodian: A custodian is a bank or financial institution that keeps custody of a client’s stock certificates and other assets of a mutual fund, individual or corporate client account.  Custodians work in tandem with RIAs to provide safekeeping of their clients’ assets.