A survey conducted by the Consumer Federation of America in conjunction with an association of eight financial planning firms known as the Zero Alpha Group has revealed that 91% of those polled want stockbrokers who provide investment advice to be regulated in the same way as financial planners and designated investment advisors.
Under an SEC proposal put forward in 1999, which the Commission has unofficially adopted by announcing that it will not bring enforcement actions against brokerages which act as if the rule is in place, brokers are permitted to provide and be paid for investment advice, and to offer fee-based accounts without being deemed investment advisors.
This means that they are in effect exempted from the fiduciary duty of care imposed on financial planners.
The Consumer Federation survey, released on Wednesday, additionally revealed that 86% of those interviewed felt that brokers should be required to disclose any incentives and commissions received for selling certain products.
The SEC is expected to take an official position on the matter by the end of 2004.
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