Registered Investment Advisors vs. Brokers
Railroad Street Wealth Management, LLC ("Railroad Street") is an Independent Registered Investment Advisory firm. As a Registered Investment Advisor (RIA) per the Investment Advisers Act of 1940 and State RIA Regulations we are required to act as a fiduciary. We must put your interests above our own and declare any conflicts of interest that may arise. We are not compensated by commission but are paid an advisory fee directly from our clients for advice and service for a percentage of assets under our care. We have no incentive to sell any product over another or trade in client accounts. Railroad Street fully discloses to our clients the fees we earn and will provide quarterly statements that clearly report the fees we receive. Our only goal when selecting investment vehicles for your investment portfolio is to ensure these products help you achieve results. Railroad Street employs the use of third party custodians for your assets, nothing is held in house. We have limited power over assets held by these custodians. Railroad Street can have funds sent to you via your address of record or have funds electronically sent to like-registered accounts.
A Broker or Registered Representative, is required only to recommend investments that are "suitable" for you. Brokers can legally put their own interest above yours when recommending investments "suitable" for the situation. Since brokers are paid by commissions on products sold, there is a subtle pressure to execute transactions. Over the last several years many brokers have begun to use titles such as "Investment Advisor" or "Financial Advisor" without accepting the fiduciary duty of a Registered Investment Advisor per the Investment As\dvisers Act of 1940 and State RIA Regulations. Some have no background or training in giving advice other than the sales training they have received. Most merely adhere to the "suitability" doctrine. Financial firms continue to blur the lines between broker-dealers and registered investment advisors by bundling new products like "wrap" or "fee based" platforms.