News | 08.09.19
Dually Registered Advisors Found to Have Conflicts and Higher Fees
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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