Investor Knowledge and Experience with Investment Advisers and Broker-Dealers

48 Pages Posted: 14 Nov 2010  

Angela Hung

RAND Corporation - Labor and Population

Noreen Clancy

RAND Corporation

Jeff Dominitz

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management; RAND Corporation

Date Written: November 11, 2010

Abstract

The financial services industry has been changing so fast and growing so complex that broker-dealers and investment advisers, which are subject to different regulations, are no longer easy to distinguish from one another. Since the 1990s, market demands have introduced new business practices and firms have taken many different forms, making it harder for investors to distinguish these traditional distinctions. Given such complexity, it is not surprising that typical investors are confused about the nature of the services their financial professional offers. Many of those surveyed, as well as focus group participants, did not understand the key distinctions between investment advisers and broker-dealers: their duties, the titles they use, the services they offer, or the fees they charge. They attributed part of their confusion to the dozens of titles used in the field, including generic titles such as financial advisor and financial consultant, as well as advertisements that claim "we do it all."

Keywords: financial services, investments, service, brokerage, advisers, advice, professional, accounts, household

Suggested Citation

Hung, Angela and Clancy, Noreen and Dominitz, Jeff, Investor Knowledge and Experience with Investment Advisers and Broker-Dealers (November 11, 2010). Pension Research Council WP 2010-31. Available at SSRN: https://ssrn.com/abstract=1707651 or http://dx.doi.org/10.2139/ssrn.1707651

Angela Hung (Contact Author)

RAND Corporation - Labor and Population ( email )

United States

Noreen Clancy

RAND Corporation ( email )

1776 Main Street
P.O. Box 2138
Santa Monica, CA 90407-2138
United States

Jeff Dominitz

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

Pittsburgh, PA 15213-3890
United States

RAND Corporation ( email )

1776 Main Street
P.O. Box 2138
Santa Monica, CA 90407-2138
United States

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