Policy Insight, Volume 3, Issue 1, February 2009

Broker-Dealers and Investment Advisers in the United States: Business Practices and Investor Understanding

by Farrukh Suvankulov, Angela A. Hung

Download Free Electronic Document

FormatFile SizeNotes
PDF file 0.2 MB

Use Adobe Acrobat Reader version 10 or higher for the best experience.

The U.S. financial services industry has become increasingly complex in recent decades, as financial firms have launched products and services that have significantly blurred the traditional distinctions between broker-dealers and investment advisers. As a result, it has become challenging for consumers to distinguish between the two types of financial professionals and to evaluate the quality of the advice they are being given. This complexity also hinders the ability of regulators to design and implement effective policies. To gain a clearer understanding of these issues, Broker-Dealers and Investment Advisers in the United States: Business Practices and Investor Understanding examines the current business practices of broker-dealers and investment advisers, drawing on an analysis of such firms' operations from 2001 to 2006. The authors also consider whether investors understand the differences between broker-dealers and investment advisers, presenting the results of a survey and set of focus groups that explored this issue.

Research conducted by

This report is part of the RAND Corporation corporate publication series. Corporate publications are program or department brochures, newsletters, pamphlets, and miscellaneous information about the RAND Corporation or RAND's business units. Some corporate publications are published in the AR series as Annual Reports or as Administrative Reports. Administrative Reports are often required by the client or sponsor and provide a status report on work resulting from a contract.

Permission is given to duplicate this electronic document for personal use only, as long as it is unaltered and complete. Copies may not be duplicated for commercial purposes. Unauthorized posting of RAND PDFs to a non-RAND Web site is prohibited. RAND PDFs are protected under copyright law. For information on reprint and linking permissions, please visit the RAND Permissions page.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.