08.10.18
New FINRA Study Finds Explosive Growth in Number of Hybrid Reps
by: Tracey Longo
The number of broker-dealers operating in the United States has edged up in the past decade, while the growth in the number of “hybrid” brokers has exploded, now accounting for some 45 percent of all brokers, according to a first-ever snapshot of the industry compiled by FINRA. Hybrid brokers are dually registered as broker and advisor reps but are generally regulated only as brokers and thus subject to a suitability standard and not a fiduciary standard. The revelation comes as the SEC considers comments regarding its Regulation Best Interest proposal. SEC officials said the proposal is designed to clarify the differences between brokers and advisors in investors' minds. But critics contend it does not apply a fiduciary standard to hybrid reps, who offer advice and advisory accounts to retail customers without registering as investment advisors.
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