No. Registered Investment Advisors (RIAs) are regulated by the State securities regulators or the SEC, depending on the size of the RIA. RIAs provide ongoing advice to their clients. In general, RIAs use the same investments offered by a broker-dealer’s registered representative. In general, RIAs use the same investments offered by the registered representative. But instead of buying and selling investments for a commission, investments are managed for an advisory fee. Our Advisors do not carry the Series 7 or 6 Commission Brokers License, so you have 100% confidence that we cannot receive commissions from the investments that we utilize.
RIAs and IARs have a duty of loyalty and are obligated to act in the best interests of their clients without regard to their financial interests or other interests they may have. This is referred to as a “fiduciary” standard of care. Any conflicts of interests must be fully disclosed up front. It is the highest standard of care in the financial services industry.
Unlike “non-discretionary” transactions that require registered representatives to have all transactions approved by the customer prior to execution, RIAs may transact business on a “discretionary” basis. This means they have authority and approval to buy and sell securities and to make other investment-related decisions on behalf of their clients without receiving prior approval. Granting discretion to the advisor is part of the advisory agreement and must be plainly spelled out.
SGH Wealth Management is an independent Registered Investment Advisor.