From the May 2007 issue of Investment Advisor • Subscribe!

The Original SEC Rule

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from The Advisor's Professional Library
  • Nothing but the Best Execution Along with the many other fiduciary obligations owed by RIAs, firms owe a duty to seek best execution of clients’ transactions.  If they fail to do, RIAs violate Section 206 of the Investment Advisers Act.
  • Agency and Principal Transactions In passing Section 206(3) of the Investment Advisers Act, Congress recognized that principal and agency transactions can be harmful to clients. Such transactions create the opportunity for RIAs to engage in self-dealing.
Download a copy of the Security and Exchange Commission's original decision on the broker/dealer exemption rule exempting brokers from regulation as an investment advisor even when they were being paid fees for investment advice.
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