A registered investment adviser (RIA) is a firm paid to advise you on investments, usually through a fee you can see, and it owes you a fiduciary duty for the whole relationship. A broker-dealer is a firm that buys and sells securities for customers, usually paid per transaction or through the product you buy, and it owes you a best-interest duty at the moment it recommends something. There were 16,544 SEC-registered advisers in 2025 and 3,184 broker-dealers in FINRA. The line between them runs through people as much as firms, though: 331,802 of the 639,723 brokers registered at the end of 2025 were also registered to give investment advice.
The short version
| RIA | Broker-dealer | |
|---|---|---|
| What it’s paid for | Advice | Executing and selling securities |
| How it’s paid | Fees: a percentage of assets, flat, hourly or per plan | Commissions, sales charges, markups and fund payments |
| Standard | Fiduciary duty, for the whole relationship | Regulation Best Interest, when a recommendation is made |
| Watching your account | Part of the duty where agreed | Not required unless agreed |
| Regulated by | The SEC, or the state for smaller firms | The SEC and FINRA, plus the states |
| Disclosure you get | Form CRS and the Form ADV brochure | Form CRS |
| Where to look it up | adviserinfo.sec.gov | BrokerCheck |
Firms and people registered in each role
Source: IAA and COMPLY Investment Adviser Industry Snapshot 2026; FINRA 2026 Industry Snapshot
Firms with less than about $100 million under management generally register with their state rather than the SEC, so the true number of advisory firms is higher than the SEC count.
What the duty means in practice
The SEC says an adviser’s fiduciary duty “applies to the entire relationship.” If the adviser agreed to watch your accounts, it has to keep watching them.
A broker-dealer’s duty under Regulation Best Interest applies when a recommendation is made, and the SEC says it “does not impose a duty to monitor a retail customer’s account.” Between recommendations, nobody is obliged to look. That’s the right arrangement for some accounts and the wrong one for others. Our guide to whether your advisor is a fiduciary covers both duties in detail, and fiduciary vs suitability explains the older broker standard you’ll still hear about.
How each is paid, and what it costs you
An RIA charges you directly. Among fee-only firms that publish prices, the median is 1% of assets a year, $4,500 a year for flat ongoing planning, $2,000 for a one-time plan or $300 an hour. Not every RIA is fee-only: some also earn commissions through a related broker-dealer or insurance agency. Our guide to fee-only vs fee-based vs commission explains the difference.
A broker-dealer is paid per transaction or through the product. That can mean a commission on a trade, a markup on a bond, or charges built into a mutual fund. FINRA caps those fund charges, and the caps show how much can sit inside a product:
- A fund’s combined front-end and deferred sales charges can’t exceed 8.5% of the offering price (for funds without an ongoing sales charge).
- Ongoing sales charges, the 12b-1 fees, can’t exceed 0.75% a year, plus a service fee of up to 0.25% a year.
These are ceilings, not typical prices. The point is that broker pay is real even when you never see a bill.
Which costs less depends on how long you’ll hold. Say you put $100,000 into a fund with a one-time 4% sales charge and hold it for 15 years: you pay $4,000 once. The same money in an advisory account at 1% costs about $1,000 in the first year and more as it grows. For a single purchase you’ll hold and never revisit, a commission can be the cheaper route. For ongoing advice, a fee is usually cheaper, and easier to see.
Dual registrants: one firm, two roles
Many firms are registered as both an RIA and a broker-dealer, and so are their people. A dual-registered advisor is a fiduciary on the advisory account and a broker on the brokerage account, and can recommend moving money between the two. The SEC requires them to consider both kinds of account when they recommend one, but you still have to know which role they’re in each time.
Ask for each account: “Is this an advisory account or a brokerage account, and are you acting as my adviser or my broker?” The account agreement and statements should say.
Where your money sits
An RIA usually doesn’t hold your money. Your accounts sit at a custodian, often a large broker-dealer, in your name, and the RIA gets limited authority to trade and to deduct its fee. That custodian is a broker-dealer, but it isn’t advising you. So “my money is at a broker” and “my advisor is an RIA” can both be true.
When a broker-dealer is the better choice
- You want to make your own trades. A self-directed brokerage account gives you access without advice.
- One purchase, then hold. A single fund or bond you’ll keep for years, where paying once costs less than paying yearly.
- You know exactly what you want. If you’ve already decided, a broker can execute it. Have a fee-only planner check the recommendation first if it’s large.
When an RIA is the better choice
- You want ongoing advice. Someone watching your accounts and your plan, with a duty to do it well.
- The questions go beyond investments. Retirement income, taxes, equity pay and estate work are planning, not trading. See retirement planning advisors in the public graph.
- You want to see what you pay. A fee-only RIA shows its whole price in dollars and earns nothing from what you buy.
How to check which one you’re talking to
- Read the first lines of Form CRS. Every firm has to state at the start “whether you are registered with the Securities and Exchange Commission as a broker-dealer, investment adviser, or both.”
- Search the firm and the person on both sites. Investment advisers and their representatives show on adviserinfo.sec.gov; brokers on BrokerCheck. Showing on both means two roles. Each person has a CRD number that links the records.
- Open the firm’s Form ADV. Part 1, Item 7A shows a related broker-dealer. Our guide to telling whether an advisor is fee-only shows each box.
- Read the record while you’re there. Disclosures, complaints and past firms are on the same pages. Our guide to checking a financial advisor walks through it.
If you decide to move from a brokerage account to an RIA, the transfer usually happens without selling. Our guide to switching advisors covers how.