Registered Investment Advisor

Seattle Registered Investment Advisor (RIA)

Laird Norton Wealth Management is a registered investment advisor (RIA) based in Seattle. What distinguishes a registered investment advisor from other types of investment advisors? Registered investment advisors in Seattle and elsewhere in the US are required by law to do what is in the best interest of each client.

What about advisors that are not RIAs? Most companies and individuals that call themselves financial advisors ― including the major Wall Street firms ― are actually commission-based salespeople. Their pay is determined mainly by the quantity and type of financial products they sell. Their legal obligation to you: investments that are suitable (known as the Suitability Rule). Beware, however: what is “suitable” can actually be against your best interest.

That’s because unlike registered investment advisors (RIAs), broker/dealers and other types of non-RIA advisors may be biased by incentives. For example, quite a few mutual funds charge sales fees, which go to the broker if she/he gets you to invest in that fund. These types of fees will be paid by you, and they put you at a disadvantage compared to a similar-performing, lower-fee fund. That is definitely not in your best interest.

A Registered Investment Advisor (RIA) Works for You

Registered investment advisors (RIAs), such as Laird Norton Wealth Management, do not work on commission or other sales incentives. We are paid solely by you, and we are legally obligated to give you advice that’s always in your best interest. Because many of the fees charged by broker/dealers and other non-RIA advisors are not fully disclosed to clients, it may seem that you are being charged less in fees. However, look deeper and compare.

Here are key questions to ask before you sign any investment advisor agreements:

  • Are you a registered investment advisor (RIA), regulated by the Securities & Exchange Commission?
  • What is the total amount I will be paying in fees, including sales fees and other incentives?
  • Will I be provided with unbiased and strategic planning for my entire financial life?
  • Will all the advice and guidance I receive from you be required by law to be in my best interest?

Know the Difference: RIAs Vs. Others

To this day, many financial advisors continue to fight against federal regulations that would require them to act as registered rnvestment advisors (RIAs) and provide advice that is in your best interest. The result: you are left to educate yourself. The chart below summarizes the main differences between Registered Investment Advisors and other types of advisors:

  Fiduciary Non-Fiduciary
  Registered Investment Advisors (RIAs) Stockbrokers/Others2
Legal Obligation to You Fiduciary Duty: Advice that’s “100% in your best interest”
(same fiduciary standard that applies to trust companies)
Suitability Rule: Advice that is “suitable”
Regulator US Government ― The Securities & Exchange Commission (SEC)3 Industry group ― Financial Industry Regulatory Authority (FINRA)
How They Get Paid Typically a set fee ― hourly, fixed or a percent of assets often between 1% and 1.5% of the assets being managing for you Commissions, trading fees, and other types of incentives on the investments they recommend to you
Fee Disclosure Typically includes investment management, financial planning and possibly trust and estate planning Not required to tell you how much you are paying in fees
Where Your Money is Actually Held Third-party custodian that is usually independent of the RIA, providing an extra layer of oversight Varies. Could be held by the financial advisor and/or a third party
Level of Service Typically includes investment management, financial planning and possibly trust and estate planning Provide some advice, but this is often tied to specific investment products, such as stocks, mutual funds, annuities or insurance policies

NOTE: Some advisors operate as “dual-registrants”; part of their operation is an RIA and part broker/dealer.
2 This includes bank representatives, professional financial planners, insurance agents, and/or any professional selling financial products.
3 RIAs are regulated by the states in which they operate if their assets under management are under $100 million.

Seattle RIA and Trust Company

Laird Norton Wealth Management is both a Seattle trust company and a registered investment advisor (RIA). In all the work we do, we are legally required to act in our clients’ best interests. We recommend investments only if we are convinced such investments will work best for you, in terms of costs, taxes, return and risk. Our definition of acting in each client’s best interest also includes:

  • Managing risk not only in your investment portfolio but across your entire asset base;
  • Budgeting and income sustainability analysis so you know what kind of spending your investment portfolio can support;
  • Minimizing investment-related income taxes;
  • Making sure your investments are aligned with your financial and estate plans; and
  • Making ongoing adjustments as your finances and your life change.