The SEC Is Broken; Evaluating Smart Beta; Where Are the Privately Owned BDs?: December Investment Advisor—Slideshow

As the main regulator of the financial services industry, the SEC has three important jobs: to protect investors; to maintain fair markets; and to facilitate capital formation. Unfortunately, the agency is facing headwinds that keep it from doing those jobs as efficiently as possible. Melanie Waddell highlights some of the challenges that stymie efficient rulemaking in this month’s cover story.

As smart beta strategies become more popular, more advisors are considering them, but Charles Schwab’s Tony Davidow worries that some advisors aren’t weighing the decision properly. There are many factors that determine how well a strategy will work for a client and they change all the time.

And, the number of top-50 privately owned broker-dealers was cut in half in six years, leaving the survivors in high demand among reps looking for a firm that will have their best interest at heart. Jon Henschen explains why we’re seeing this trend and how it will affect BDs of different sizes.

The SEC Is Broken

The Securities and Exchange Commission has three primary mandates: to protect investors; to maintain fair, orderly and efficient markets; and to facilitate capital formation.

However, as the commission has demonstrated in recent years, especially since it took on the massive job of implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act, it is a broken agency that is failing to do its job.

Melanie Waddell spoke with industry insiders to learn more about the inner workings of the financial services regulator.

Read the full article.