News | 11.08.19
SEC Cracks Down On Hybrid RIAs' Sweep Money Market Accounts
The SEC is cracking down on dually registered advisors' use of more costly money markets and cash sweep arrangements when less expensive products are available, said Stephanie Avakian, co-director of the SEC's Division of Enforcement, at a London conference. Since interest started to rise in 2016, sweep money market accounts that pay far less than other money market funds have been a huge source of profits for broker-dealers, banks, and custodians. In some cases, SEC examiners are finding that dually registered advisors and brokers are making more than investors on the money markets they recommend because of the incentives advisors are paid and the higher costs that are passed on to investors, Avakian said.
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