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Brokers and Advisers-What’s in a Name?

Barbara Black

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: 27

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Date posted: October 12, 2009  

Suggested Citation

Black, Barbara, Brokers and Advisers-What’s in a Name? (October 15, 2009). U of Cincinnati Public Law Research Paper No. 09-29. Available at SSRN: http://ssrn.com/abstract=1487706

Contact Information

Barbara Black (Contact Author)
University of Cincinnati - College of Law ( email )
P.O. Box 210040
Cincinnati, OH 45221-0040
United States
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