Can registered investment advisor pay commissions or referral fees?

Answer 1

RIA's can pay referrral fees to "solicitors" if both parties follow a couple of very specific rules. The RIA must disclose in it's brochure (ADV II) that it pays referral fees and the referred client must receive a copy of the brochure prior to signing a service agreement with the RIA. Also, the solicitor must provide the client with a disclosure outlining the agreement he has with the RIA at the time the referral if provided to the client. There are a lot more specifics that apply to different situations, but this gives you the basic outline.