Broker-Dealers vs Investment Advisers

The non-profit research group, the RAND Corporation, put out a technical report last month about the increasingly blurred line, particularly since the 1990s, between broker-dealers and investment advisers. The full study can be found here, while a much shorter summary is here.

Some highlights:

• about half of the over 10,000 investment advisory firms in 2006 had fewer than 10 employees.
• the number of brokerage firms declined about 10% to just over 5,000.
• the number of firms on both lists was around 550.
• over 72% of clients surveyed were "very satisfied" with the services they received from these firms, with the most desired qualities being trustworthiness, attentiveness, and accessibility.
• over 45% of clients found their professional through a family or friend referral.
• however, client confusion as to the difference between investment advisers and broker-dealers and what services they perform was commonplace.