Therefore, it is continuing to grow in popularity and registered investment advisors (RIAs) are stepping up to the plate to help clients identify worthwhile and trustworthy opportunities in the fragmented world of private real estate.
Is an RIA the same as a fiduciary?
RIAs are considered to be acting in a fiduciary capacity, and so held to a higher standard of conduct than registered representatives. This fiduciary standard mandates that an RIA must always unconditionally put the client’s best interests ahead of their own, regardless of all other circumstances.
How do RIAs make money?
Paid much like mutual fund managers, RIAs usually earn their revenue through a management fee consisting of a percentage of assets held for a client. Fees fluctuate, some close to 0.5% and others upwards of 2%. Generally, the more assets a client has, the lower the fee they can negotiate—sometimes as little as 0.35%.
Is it better to own real estate or REITs?
REITs allow individual investors to make money on real estate without having to own or manage physical properties. Direct real estate offers more tax breaks than REIT investments, and gives investors more control over decision making.