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Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Tuesday, December 8, 2009

Adviser Group Releases Survey of Financial Professionals' Views on Fiduciary Standard

The SEI Advisor Network and The Committee for the Fiduciary Standard recently conducted a survey of financial advisers and brokers to determine the level of support and understanding of the fiduciary standard.  The survey was completed by 890 RIAs, IARs and registered broker-dealers, who self-identified their compensation structures as follows:  commission (132), commission-fee (510) and fee-based and fee-only (242).  The findings include:

A majority of brokers (53%) believe that "all financial professionals who give investment and financial advice should be required to meet the fiduciary standard;"  twenty-seven percent disagree with the statement.  Among those who identified themselves as fee-based and fee-only advisers, 86% agreed with the statement.

Eighty percent of brokers stated that they understood the fiduciary standard either "fairly well" or "very well."  Nearly all (98%) of advisers stated they understand the standard "fairly well" or "very well."

Respondents were asked if they believed that they should be allowed to meet a fiduciary standard in providing advice and then revert to a suitability standard when recommending products.  Ninety-three percent of fee-based and fee-only advisers disagreed with that statement, as did fifty-five percent of commission-fee brokers.  In contrast, thirty-seven percent of commission-only brokers disagreed with that statement.

As to compensation, fifteen percent of advisers said that they believe investors do not care how they are compensated, in contrast to fifty-six percent of commission-fee brokers and sixty-three percent of commission-only brokers.

http://lawprofessors.typepad.com/securities/2009/12/adviser-group-releases-survey-of-financial-professionals-views-on-fiduciary-standard.html

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