Post by cxgllc on Oct 17, 2018 10:38:59 GMT
A broker is a person who executes the trade on behalf of others, whereas a dealer is a person who trades business on their own behalf. A dealer is a person who will buy and sell securities on their account. On the other hand, a broker is one who will buy and sell securities for their clients.
In effect, the representative with which the client works has to switch between two hats, deciding if he or she is required to act as a fiduciary, behaving in a way that is in the best interest of the client, or a broker-dealer, which allows him or her to generate income by selling the customer financial products that meet the suitability standard. Regulators seem to have taken a much closer look as the number of dually-registered broker-dealers has increased in recent years despite being what is still an objectively small percentage of the overall financial industry.
Stock Broker Compliance | Outsource Series 79
In effect, the representative with which the client works has to switch between two hats, deciding if he or she is required to act as a fiduciary, behaving in a way that is in the best interest of the client, or a broker-dealer, which allows him or her to generate income by selling the customer financial products that meet the suitability standard. Regulators seem to have taken a much closer look as the number of dually-registered broker-dealers has increased in recent years despite being what is still an objectively small percentage of the overall financial industry.
Stock Broker Compliance | Outsource Series 79