Document Information
Investor and Industry Perspectives on Investment Advisers and Broker-Dealers
In theory, financial professionals are relatively distinct: A broker conducts transactions in securities on behalf of others; a dealer buys and sells securities for his or her own accounts; and an investment adviser provides advice to others regarding securities. Broker-dealers and investment advisers are subject to different regulatory structures. But trends in the financial services market since the early 1990s have blurred the boundaries between them. Regulatory reform requires a clearer understanding of the industry’s complexities. The U.S. Securities and Exchange Commission asked RAND to conduct this study to examine the professionals’ current business practices and whether investors understand differences between and relationships among them. The report describes a heterogeneous industry, with firms taking many different forms and offering a multitude of services and products and with investors failing to distinguish broker-dealers and investment advisers along regulatory lines. Despite this, investors express high levels of satisfaction with the services they receive from their own financial service providers. This satisfaction was much more frequently reported to arise from the personal attention the investor receives than from the actual financial returns arising from this relationship.
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Pages: 228
ISBN/EAN: 9780833044037
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Contents
Chapter One:
Introduction
Chapter Two:
Regulatory and Legal Background
Chapter Three:
View of the Industry from Published Sources
Chapter Four:
Insights from Industry Data
Chapter Five:
Documentation and Information Provided by Firms
Chapter Six:
Investors’ Level of Understanding
Chapter Seven:
Conclusions
Appendix A:
Descriptions of Regulatory Filings, Data Sets, and Use of the Data for Identification of Dual and Affiliate Activity
Appendix B:
Other Retail Providers of Financial Services
Appendix C:
Attributes of Investment Advisers and Broker-Dealers
Appendix D:
Additional Detail on Sampling Method of Document Collection
Appendix E:
Disclosures by Type and Information Source
Appendix F:
American Life Panel
Appendix G:
Detailed Results of Household Survey and Focus Groups
Appendix H:
Supplemental Analysis of Industry Data from 2001 to 2006
The research described in this report was conducted by the LRN-RAND Center for Corporate Ethics, Law, and Governance within the RAND Institute for Civil Justice and commissioned by the U.S. Securities and Exchange Commission (SEC).
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