Brokers and Advisers-What’s in a Name?
University of Cincinnati - College of Law
October 15, 2009
Fordham Journal of Corporate & Financial Law, Vol. 11, p. 31, 2005
U of Cincinnati Public Law Research Paper No. 09-29
The article addresses two recent developments - the adoption by the SEC of a rule that allows brokerage firms to market fee-based accounts without registering as investment advisers and the increase in brokerage advertising that promotes the image of the broker as a trusted family friend and financial adviser. Professor Black argues that as a result of these developments investors are likely to be misled into believing that their brokers are investment advisers, with the fiduciary obligations the law requires of them, instead of brokers, whom the law generally treats as salespersons. She proposes two recommendations: (1) that brokers should not be allowed to call themselves "financial advisers" or "financial consultants"; or, assuming the SEC will not adopt this recommendation, (2) brokers should be held to their word and be obligated to provide the "competent, unbiased and continuous advice" that they promise.
Number of Pages in PDF File: 27Accepted Paper Series
Date posted: October 12, 2009
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