Poll: Investors Clueless About RA, Broker Regulations

November 22, 2004 (PLANSPONSOR.com) - Investors are apparently laboring under massive confusion about the rules governing brokers and financial advisors and the differences between the two, according to a survey.

A TD Waterhouse Group, Inc. news release said a majority of investors mistakenly believe brokers are legally obligated to act in the investor’s best interest while only a quarter knew that investment advisors have such an obligation. The announcement said the respondents were also befuddled about other advisor rules, such as the duty to inform customers of any conflicts of interest before providing investment advice.

Nearly nine in 10 (84%) of those questioned said financial advisors and brokers that offer fee-based financial advice should come under the same industry regulation, according to the announcement. Almost as many said they are concerned about the differences and agreed they would be more likely to choose an investment advisor over a broker if they knew they would receive more protections by doing so.

Finally, investors said they are very concerned that both can offer financial advice without being subject to the same rules. Some 90% of the investors surveyed want Congress to set uniform standards of protection for stockbrokers and investment advisors who provide fee-based financial advice, the poll found.

The survey, conducted in October, covered 1,000 investors who hold stocks, bonds or mutual funds outside an employer-sponsored retirement plan, such as a 401(k).

More information about the poll is at http://www.tdwaterhouse.com/home/press/releases/11.22.04_release.pdf .