Brokerage vs. RIA: Is There Really a Difference?

In this episode of THE FINANCIAL COMMUTE, host Chris Galeski invites Priscilla Brehm to discuss the differences between brokerage firms and RIAs (Registered Investment Advisors). 

Priscilla and Chris encourage listeners to understand how compensation works when choosing between an RIA and brokerage firms, as brokerages often compensate their advisors based on transactions, which can lead to potential conflicts of interest. On the other hand, RIAs are generally compensated through a fee structure, which may align the advisor’s incentives more closely with the client’s success. Furthermore, listeners should understand the investment philosophy of the advisor, whether the advisor requires the client’s approval for every transaction, and whether the advisor acts as a fiduciary since fiduciaries are legally obligated to put their clients’ interest ahead of their own.