The Pension Research Council
Working Paper

Harmonizing the Regulation of Financial Advisers

Arthur B. Laby
WP2012-17

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Abstract — When buying stocks, bonds, mutual funds, and other securities, individuals seeking advice typically turn to broker-dealers or investment advisers before they invest. In many cases, brokers and advisers perform similar functions but they are regulated differently under laws enacted during the Great Depression. Regulators are considering ways to harmonize the regulation of these professionals, but harmonization is fraught with difficulties. This paper discusses the debate over harmonization and explains how the U.S. Securities and Exchange Commission, the courts, and Congress have responded. The paper concludes with insights into considerations that will likely determine how the harmonization debate will be resolved.