Title

The Breakdown of Legal Categories: Brokers, Dealers, Financial Planners and Advisers

Document Type

Article

Publication Date

3-2009

ISSN

1529-1332‎

Publisher

America's Community Bankers

Language

en-US

Abstract

The regulation of broker-dealers and investment advisers has been separate and distinct since the 1940s. The old system is broke because it does not reflect the market breakdown of the categories on which it is based. In light of the excesses of large brokerage firms and the failure of self-regulation that the brokers asserted was sufficiently robust, there are calls for imposing fiduciary duties on brokers. That means there are circumstances in which brokers are held to be fiduciaries under the current law. The brokers are up in arms against this change. No doubt, objections to the imposition of a blanket fiduciary duty on all brokers will be based on questions about various scenarios that have no clear answer. But that is not so bad. Let brokers move away from a bright-line rule and worry about the gray areas that surround it.

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