08.09.19
Dually Registered Advisors Found to Have Conflicts and Higher Fees
by: Mark, Jr. Schoeff
Registered investment advisors (RIAs) who also are registered as brokers are rife with conflicts of interest and charge their clients more than independent RIAs, according to a new academic study by Nicole Boyson, professor of finance at Northeastern University. The study found that dual registrants "have numerous conflicts of interest," including cross-selling of insurance products, revenue sharing with third-party mutual fund families and selling proprietary investment products. The study also found dual registrants charge an average of 2.1 percent on assets under management, compared to the 1 percent fee assessed by most RIAs. "The most obvious policy implication of my study is that dual registered investment advisors — who are required to act as fiduciaries — often fall short of the spirit of the fiduciary standard," Boyson wrote in the paper.
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