October 29, 2026 · 7 min read
Investment Adviser Representative vs RIA: Key Differences
The firm that gives investment advice and the person who delivers it. Who registers where, what each must tell you and how to check them.
- Market structure
RIA vs IAR is the difference between a firm and a person. A registered investment adviser (RIA) is a firm registered with the SEC or a state to give investment advice for pay. An investment adviser representative (IAR) is a person who gives that advice on the firm’s behalf, licensed by the state. You sign with the RIA. You usually talk to the IAR.
If you are choosing someone to advise you, for example on stock options or a large portfolio, you need to check both. The firm owes you a legal duty and must describe its fees and conflicts in writing. The person must hold a license and has a public record you can look up.
$100M
Assets an adviser generally needs to register with the SEC instead of a state
$110M
Assets at which SEC registration becomes required
92 of 130
Questions an IAR candidate must answer correctly on the Series 65 exam
120 days
Time after its fiscal year-end an adviser has to send clients an updated brochure or summary
RIA vs IAR: What Is the Difference?
The table compares a registered investment adviser and an investment adviser representative on what each is, who registers it, the exam, the legal duty, tax, the main risk, liquidity and a typical example.
The RIA is the firm that is legally responsible for the advice. The IAR is the licensed person who delivers it
As of October 2026 · Investment Advisers Act §§202, 203A, 208; 17 CFR 275.203A-1, 203A-3; SEC Release IA-5248 (2019); SEC Form ADV Part 2; FINRA and NASAA exam pages. Examples are illustrative. US rules.
RIA vs IA: Is Every Investment Adviser Registered?
No. Investment adviser, or IA, is the legal term for anyone who advises others about securities for pay. The law spells it adviser, while firms often write advisor. An RIA is an IA that has registered. Some groups are left out of the definition, such as banks, lawyers and accountants whose advice is only incidental, and family offices.
Other advisers are exempt from registering but still report. An exempt reporting adviser advises only certain private funds, such as venture capital funds, and files parts of Form ADV with the SEC. Axevil is one: it is an exempt reporting adviser with SEC file No. 802-126907.
The word registered has a limit. The law bars an adviser from suggesting that registration means the SEC or any agency has approved or recommended it. Registration means the firm is on file and subject to the rules.
SEC or State: Where an RIA Registers
Where an RIA registers depends mainly on its assets under management, the client money it manages. The Investment Advisers Act and the SEC’s Rule 203A-1 set the lines:
- Under $100MThe firm generally registers with the state where it has its main office.
- $100M to $110MThe firm may choose SEC registration.
- $110M and aboveThe firm must register with the SEC.
- Falling below $90MAn SEC-registered firm needs to switch to its state only once its assets drop below $90M.
The gap between $90M and $110M means a firm does not have to switch regulators each time markets move.
How an Investment Adviser Representative Gets Licensed
An IAR is defined by whom they serve. Under SEC Rule 203A-3, a person at an advisory firm counts as an IAR if they have more than five clients who are individuals, and individuals make up more than 10% of their clients. Someone who advises only institutions, or never deals with clients, is usually not an IAR.
States license IARs, even those who work for an SEC-registered firm. The firm files a Form U4 for the person with each state where they have a place of business. Most states require one of these:
- Series 65A law exam run by NASAA, the association of state securities regulators, and given by FINRA. It has 130 scored questions in 180 minutes, and a pass is 92.
- Series 66 plus Series 7A combined exam for people who also work as brokers. Together they count as the Series 65.
- A professional designationMost states accept a CFP, ChFC, CFA, PFS or CIMA in place of the Series 65.
A Series 65 license held in good standing also qualifies the holder as an accredited investor, so they can buy private offerings in their own name.
Fiduciary Duty: What the Firm Owes You
An adviser owes its clients a fiduciary duty. The SEC set out its view in a 2019 interpretation. The duty has two parts, a duty of care and a duty of loyalty, and it covers the whole relationship with the client.
- Duty of careAdvice must be in your best interest, based on a reasonable understanding of your goals. It includes seeking the most favorable terms for your trades and monitoring the account when that is part of the service.
- Duty of loyaltyThe firm may not put its own interests ahead of yours. It must disclose its conflicts fully so that you can give informed consent.
The duty belongs to the firm. An IAR is a supervised person who acts on its behalf, and the firm answers for the advice they give. That is why the firm’s compliance and supervision matter as much as the individual’s skill.
How to Check an RIA and Its Representatives
Both the firm and its people can be looked up for free on the SEC’s Investment Adviser Public Disclosure site. Three documents do most of the work:
- Form ADV Part 2AThe firm brochure: services, fees, conflicts and any discipline. You must receive it before or when you sign, even if the agreement is oral.
- Form ADV Part 2BThe brochure supplement on the people who will advise you, with their education, experience and disciplinary history.
- The annual updateWithin 120 days of its fiscal year-end, the firm sends an updated brochure or a summary of material changes.
Read the fee section closely. It shows whether the firm charges a share of your assets, a flat fee or hourly rates, and what other pay it receives. Those details shape its conflicts more than any title does.
RIA vs IAR: What Each Tells You
Registered Investment Adviser
- Tells you
- The firm is on file with the SEC or a state, owes you a fiduciary duty and must give you a brochure on fees and conflicts.
- Does not tell you
- Whether its advice is good. Registration is no endorsement, and the size threshold says nothing about quality.
Verdict: RIA status sets the legal frame for the relationship. It decides who is responsible and what you must be told. Judge the firm by its brochure, its fees and its record.
Investment Adviser Representative
- Tells you
- The person passed a state exam or holds an accepted designation and works under an adviser’s supervision.
- Does not tell you
- How experienced they are or how they are paid. The brochure supplement and the public record fill that gap.
Verdict: IAR status is a license to advise individuals. It shows a minimum standard of knowledge. The firm behind the person carries the legal duty.
You hire an RIA and work with an IAR. Check the firm’s brochure for fees and conflicts, and the person’s record for licenses and discipline.
What It Means If You Are Choosing an Adviser
If you have equity compensation or shares in a private company, you may want advice before you sell or exercise. Start with the firm. Ask where it is registered and request its Form ADV Part 2A. Then ask who will advise you and read their Part 2B.
Private-company shares raise questions many advisers rarely see, such as transfer approvals, lock-ups and Rule 144. Ask whether the firm has advised on them before. Advice on taxes may need a separate tax professional.
Common Mistakes
- Treating “registered” as approvalThe law forbids an adviser to suggest that registration means the SEC approved it.
- Checking the person and skipping the firmThe fiduciary duty and the fee disclosure sit with the firm.
- Assuming a bigger firm is saferThe $110M line decides where a firm registers. It says nothing about the quality of advice.
- Confusing an IAR with a brokerSome people are both. Ask in which role they are acting when they recommend something.
The Terms This Page Uses
- Investment adviser (IA)
- Anyone who, for pay, advises others about securities, unless the law excludes them.
- Registered investment adviser (RIA)
- An investment adviser registered with the SEC or a state securities regulator.
- Investment adviser representative (IAR)
- A person at an advisory firm who advises individual clients and is licensed by the state.
- Exempt reporting adviser
- An adviser to certain private funds that is exempt from registration but files reports on Form ADV.
- Assets under management
- The client money an adviser manages. It decides whether the firm registers with the SEC or a state.
- Fiduciary duty
- The adviser’s legal duty of care and loyalty to its clients over the whole relationship.
- Form ADV
- The adviser’s filing with the SEC or the states. Part 2A is the firm brochure, and Part 2B covers its advisers.
- Form U4
- The filing a firm makes to register a person with securities regulators.
- Series 65
- The state law exam, run by NASAA and given by FINRA, that most IARs must pass.
What People Ask About RIAs and IARs
Yes, in practice. The fiduciary duty belongs to the adviser firm, and an IAR gives advice on its behalf and under its supervision. The firm answers for that advice.
No. By definition, an IAR is a supervised person of an investment adviser. To advise clients alone, a person would need to register their own advisory firm.
It depends on its size. A firm generally needs $100M of client assets to register with the SEC and must do so from $110M. Smaller firms register with their state.
No. The Investment Advisers Act bars an adviser from suggesting that registration means any US agency has approved or recommended it.
It is the exam most states require before licensing an IAR. NASAA writes it and FINRA gives it. It has 130 scored questions in 180 minutes, and a pass is 92.
Where Every Rule on This Page Comes From
Figures were last checked on October 29, 2026. The rules are United States federal rules, and state rules on licensing IARs vary. Exam details come from FINRA and NASAA and can change.
- 01US Code (Cornell LII)Current lawInvestment Advisers Act §202(a)(11) and (a)(25): definition of investment adviser, exclusions, supervised person
- 02US Code (Cornell LII)Current lawInvestment Advisers Act §203A: state and SEC registration, $25M and $100M lines, state licensing of IARs
- 03US Code (Cornell LII)Current lawInvestment Advisers Act §208(a): registration does not imply approval
- 04Code of Federal Regulations (Cornell LII)Current rule17 CFR 275.203A-1: $100M to $110M band, $90M withdrawal line
- 05Code of Federal Regulations (Cornell LII)Current rule17 CFR 275.203A-3: definition of investment adviser representative
- 06Code of Federal Regulations (Cornell LII)Current rule17 CFR 275.204-4: exempt reporting advisers file reports on Form ADV
- 07US Securities and Exchange Commission06.05.2019Release IA-5248: fiduciary duty of care and loyalty over the entire relationship
- 08US Securities and Exchange CommissionCurrent formForm ADV Part 2 instructions: brochure delivery, 120-day annual update, brochure supplements
- 09FINRACurrent pageSeries 65: NASAA exam, 130 scored questions, 180 minutes, pass 92
- 10NASAACurrent pageExam FAQs: Form U4, Series 66 with Series 7, designations accepted in place of the Series 65
This page explains how a market works. It is not investment advice, not a recommendation of any security, strategy or company, and not an offer to sell or a solicitation to buy anything. Private companies may never list or be acquired, positions in them can be illiquid for years, and the entire amount invested can be lost. Figures are accurate as of the dates shown and change. Requirements for investor status, and the tax treatment of a private holding, differ by jurisdiction — the jurisdiction is named wherever this page discusses either. Prepared by the AXEVIL Capital research team.
What closed on the private market in the past two weeks
The rounds that priced, the tender offers that opened and the listings that filed — with the structure of each deal and the date on every figure. Written by the team that reads the paperwork.
Where to go from here
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Private equity & fundsWhat Is a Family Office? Definition, How It Works and ExamplesA family office manages the wealth of one family, or several, with its own staff. Single vs multi-family offices, the SEC rule, examples and how they invest.
Securities lawWhat Is an Accredited Investor? Definition, How It Works and ExamplesAccredited investor meaning: a person or entity that passes an SEC test on income ($200K), net worth ($1M) or a securities license and may buy private deals.