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October 17, 2018 at 10:27 PM
The Securities and Exchange Commission’s Office of the Investor Advocate and the RAND Corp. have released research that aims to help the SEC craft its advice-standards package for brokers and advisors.
The 156-page research report, The Retail Market for Investment Advice, was undertaken prior to (and is separate from) the SEC’s release of the proposed standards of conduct rulemaking package.
However, the think tank and the Investor Advocate’s office state that because the research provides data that may be relevant to the commission’s consideration in the rulemaking, they submitted it to the public comment file.
Investor testimony about the commission’s proposed Form CRS Relationship Summary, they state, is expected to be made available in the comment file in the near future.
The RAND/Investor Advocate report is the result of literature reviews, focus groups and a survey to assess initial conditions and documents tied to new information about investor interactions with financial professionals.
The findings are based on newly collected data from focus groups and surveys.
“These qualitative and quantitative data help us understand current investor views on financial advice,” the report states.
Micah Hauptman, financial services counsel for the Consumer Federation of America, told ThinkAdvisor Wednesday that the report “confirms what we already know regarding retail investors’ lack of knowledge about critical differences” between broker-dealers and investment advisors.
“Rather than preserving hazy distinctions between the two, which retail investors won’t be able to understand, the SEC should provide the same strong protections for brokers and advisors alike,” Hauptman said. “That standard should follow the framework Congress set out in section 913(g) of Dodd-Frank.”
