Investment Advisers and Broker-Dealers

Abstract

The financial service industry is becoming increasingly complex and more difficult to regulate. This brief describes broker-dealers and investment advisers—their numbers, size, assets, clients, services, and affiliations—and examines whether individual investors understand the differences between them. It reports that the industry is increasingly heterogeneous, with thousands of firms taking many different forms and bundling diverse services. As a result, the average investor is confused about financial professionals’ titles, duties, and fees.

Keywords: financial service, investors, Securities, broker-dealers,investment advisers

JEL Classification: G00, G2, G24, G28, G4