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Barry Ritholtz: Stock-Brokerage Industry Enters The Twilight Years
Ted, I am with you. I thought this would happen a long time ago as folks become more educated. But the fact is that even though there are many fewer brokerage firms than there were twenty years ago, the ones that remain are mostly enormous. They have tons of money that they use to lobby Congress to limit regulations on what they do. Consider the DOL rules just recently implemented. There are a ton of exceptions to the new fiduciary requirements, with more and more commission options being deemed "in clients' best interests". Firms that a year ago had drafted very different business structures based on what the DOL then appeared to be, and who were telling their clients that getting rid of commissions was a good thing, have backtracked and are now telling clients that charging commissions is now much better for them.
Yes, the RIA industry, which is the true fiduciary arena, has seen assets grow tremendously. But the average retail client still thinks their "broker" or "advisor" is doing a wonderful job and has no clue how much they are overpaying for what they get. So I think "twilight years" is wishful thinking.
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Yes, the RIA industry, which is the true fiduciary arena, has seen assets grow tremendously. But the average retail client still thinks their "broker" or "advisor" is doing a wonderful job and has no clue how much they are overpaying for what they get. So I think "twilight years" is wishful thinking.